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Self Employment Income Support Scheme (SEISS)

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Posted on: May 7th, 2020 by Leticia | | Categories: Uncategorised

Self Employment Income Support Scheme (SEISS)

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The scheme opens on 13 May and we have become aware that agents will not be able to apply on behalf of their clients………So it’s up to you to get online and make your application. We will of course be available to help if required.

How it works:

Under this scheme, self-employed workers will be able to apply for taxable grants to combat a loss of income due to the coronavirus pandemic. Here’s how it’ll work and some eligibility criteria…

• The grants are worth up to 80% of your profits. This is capped at £2,500 a month and is taxable. As it’s a grant, it means you don’t have to pay it back.

• Grants are decided on your profits over the last three years.

• You must have filed a tax return for 2018/19. This means you must have been self-employed prior to 6 April 2019. The last possible moment to file a 2018/19 tax return was Thursday 23 April (the deadline had been extended from 31 January 2020). If you only had a few months’ self-employment on your 2018/19 return, this will be counted as your total profit for the year – the Government won’t pro-rata it based on your monthly profits.

• You must earn more than 50% of your total income from self-employment. This must have been the case for either your 2018/19 tax return or, if not, the average of your 2016/17, 2017/18 and 2018/19 tax returns.

• Your average trading profit must be less than £50,000/year. This is essentially a ‘cliff-edge’ requirement – so those whose average annual trading profit is more than £50,000 (to be specific, £50,000.01 and above) won’t be able to get any support from this scheme.

For both these requirements, the Government says it will first check your 2018/19 tax return – if you met the requirements that year, you’ll be eligible.

However, if you earned more than £50,000 (or earned less than half of your income from self-employment) in 2018/19, the Government will then check your 2016/17 and 2017/18 tax returns, if you filed them for those years. If on average over the three years you earned less than £50,000 and made more than half your income from self-employment, you’ll still be eligible.

• You don’t need to apply (yet) – you’ll be contacted THIS WEEK. If you’re eligible for the scheme, you’ll be contacted either by letter, text or via email. HMRC says the majority of people will be contacted this week. If you’re eligible, you will be given a date and time to make an application.

• Applications will open on Wednesday 13 May with many receiving payments by 25 May and some even by 21 May (provided it’s at least six working days from application). Payments will likely be backdated to cover March, April and May (in the form of a lump sum). The scheme will operate across the UK and is set to last for at least three months, though this could be extended.

• Unlike the employee scheme, here you CAN keep working. And you do not need to prove coronavirus impact. However, HMRC says it only expects people to use the SEISS if they’ve been negatively impacted, and is introducing checks to prevent fraud.

• You can also apply for universal credit (SEISS doesn’t make you ineligible). The best approach is to apply for universal credit now, and if you start receiving self-employed income support in June too then this will be classed as income, meaning the amount of universal credit you receive will decrease.

What will happen:

• The majority of people will be contacted by HMRC THIS week – either by letter, text or via email (do be careful if you get one to check it isn’t spam).

• When you’re contacted, HMRC will explain the application process and help you get ready to make a claim. If you’re eligible, you will get a date and time to make an application.

• The claims service is set to open on Wednesday 13 May – the majority of applications will be done between 13-18 May.

• Payments to reach accounts from 21 May with most receiving them by at least 25 May (provided it’s at least six working days after a claim has been made). The payment is currently planned to cover March, April and May, so three months’ pay out.

Don’t worry if you haven’t yet been contacted, and you think you could be eligible. You can use HMRC’s online tool to find out if you’re eligible. You’ll just need your self assessment Unique Taxpayer Reference (UTR) number and your National Insurance (NI) number to hand. Once your check is complete, if you are found to be eligible, you will be provided with a date when you can submit your claim.

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