Self-employed Income Support Scheme (SEISS)

Introduction and those covered by the scheme

This SEISS scheme has been introduced to provide grants to the self-employed and members of partnerships, who are assumed to have lost profits due to Covid 19. It applies to those who have traded in 2018/19 and have submitted a tax return for that year, and who have continued to trade in 2019/20 and intend to continue to trade in 2020/21. The trades you are involved in can be different from year to year.

Critically, as part of the claim, you will need to certify that your business profits have been adversely affected by Covid 19, though you may find later that you are fortunate enough to be continuing to trade profitably, but you are still entitled to the grant if you have a short-term profit reduction. Our recommendation is that you keep good enough records to show that a problem existed so you can deal with any check by HMRC later.

Those who have started self-employment after 5 April 2019 will not benefit from the scheme.

HMRC will identify those who potentially qualify on the basis of Tax Returns submitted and will write to them in mid-May with a calculation of the grant, inviting them to claim. The claim must be made using a Government Gateway Business Tax Account. It has not been announced whether agents will have a role to play in the claims process but it is currently believed to be unlikely that agents can claim on behalf of clients, so it is essential that every self-employed taxpayer has their own Gateway account.

Eligibility

Taxable trading profits must be less than £50,000 and more than half of total income for either:

1. The tax year 2018/19 or
2. The average of the tax years 2016/17, 2017/18 and 2018/19.

Profits from all trades are added together and a loss in any year is included as a negative. Losses brought forward are ignored, and there is no pro rating of profits for short periods eg when trade commences.

Amount of Grant

The amount of the grant is based on the average taxable trading profit over the three tax years 2016/17, 2017/18 and 2018/19. The grant per month will be the lower of:

1. 80% of the average taxable trading profit divided by 12, and
2. £2,500

The scheme will run for 3 months from 1 March 2020 and payment for the full 3 months will be paid in one lump sum in June. The grant is subject to tax and Class 4 NIC.

Action you need to take now

There are two actions you need to take now:

1. Ensure that you have set up a Business Tax Account, and that will need you to already have or to set up a Government Gateway account, with a username and password. Please provide us with these Gateway credentials, so we can assist if you need us to do so. Do this in good time, as it can take a couple of weeks to have the account activated.

To start the process, if you haven’t already got a Gateway account, please go to – the website will lead you through the steps you need to take.

2. You also need to ensure that your financial records are robust enough to demonstrate that you are adversely affected by Covid 19, so showing cashflow and profit levels every month during the crisis.