The article below summarises:
- the key points relating to the Self-employment Income Support Scheme
- a few practical considerations if you’re going to apply for the scheme
I find the rather lengthy paragraphs in GOV.UK and HMRC publications a bit daunting so I thought it might be useful to create a simple flowchart to explain the key points of the Self-employment Income Support Scheme.
- The scheme is aimed at people with simple tax affairs, typically sole traders who submit a tax return via self assessment.
- Crucially, it doesn’t make any provision for owners of limited companies that typically receive their income via a combination of salary and dividends. If you would like to sign a petition asking the government to address this omission you can find one at change.org
- If your average trading profit over 2/3 years or your trading profit in 18/19 exceeds £50k, even by £1, you won’t be eligible.
- To be eligible you MUST have filed a tax return for the 18/19 tax year. If you’ve not submitted one yet HMRC have extended the deadline by 4 weeks to the 23rd April 2020.
- Unfortunately the scheme won’t help if you recently became self-employed (i.e on or after April 6th 2019).
- This will be a taxable grant which doesn’t require repaying but will be taxable and should be entered on your tax return when you complete it.
- Details are a bit sketchy at the moment but the plan is for the grant to paid at the end of June. It will be backdated to March and payable in one instalment directly into your bank account.
- The amount of grant you receive will equate to 80% of three month’s trading profit, capped at £2,500/mth. Given that grant is going to be backdated to March this means that the maximum amount you could receive in June will be £7,500.
- You shouldn’t contact HMRC. They will contact you if you are eligible. This is the advice on the HMRC website but between now and June my inclination would be to assess your eligibility and contact them as soon it becomes clear that payouts are being made. We will keep our ear to the ground on this and let you know as soon as anyone confirms that they have received a grant from the SEISS.