Most self-employed people will qualify for the government’s coronavirus self-employed income support scheme (SEISS).
Guidance has been issued about how to calculate trading profits, and also the interaction with Universal Credit, (UC). Some people will apply for UC to cope with cash flow difficulties arising from the forecast payment timetable for SEISS.
Making a Claim
HMRC makes it clear that the online service should be available from early June. HMRC will aim to contact those eligible by mid-May. Taxpayers are asked not to contact HMRC for further details yet. Further information will be provided in due course about how those who are unable to make a claim online will be able to apply.
It is important to remember that this grant is taxable, so subject to income tax and NIC. If you have any queries about this, please let us know.
Interaction With Claims for Universal Credit
A claim for Universal Credit (UC) can be made while individuals wait for the SEISS grant to arrive. However, HMRC does warn that the grant could affect how much UC applicants are entitled to later on. This is because any grant received will be classed as income for UC purposes in the claim period the payment is received. (Any UC claims for periods in which no grant is received should not be affected.)
Who is Eligible for Self-Employment Income Support?
To qualify, you must:
· have submitted your 2018/19 tax return to HMRC,
· have trading profits of less than £50,000, and
· these profits must constitute more than half of your total income.
In addition, you must have “have lost trading profits due to coronavirus”. It remains unclear how these conditions will be monitored or if HMRC will impose any claw-back mechanism should these conditions not be met. The guidance does indicate that claimants will need to confirm to HMRC that their business has been adversely affected by COVID-19.
HMRC has also issued information about how profits and income should be calculated. Good news! The friendly experts at Re:Accounts are here to look after this for you. We understand the guidelines and number crunching needed…. and we’re here to help.
One Last Point…
If you haven’t yet submitted your tax return for 2018/19, you must do so by 23 April 2020 to be eligible for the scheme. Don’t worry… there’s still time… just!
Remember, if you have any tax or accounting queries please let us know. We are here to support you.