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Insights | Coronavirus

Guidance on Self-employment Income Support Scheme

Key information on the SEISS, including details of the eligibility criteria

Last updated: 20 May 2020, 15:00

Contents

Information on the Self-employment Income Support Scheme (SEISS), including information on eligibility, the application process and disputes.

What you need to know

Who can claim: Self-employed individuals or a member of a partnership (as long as certain criteria are met, see below). Limited companies and trusts are not entitled to claim.

How much can be claimed: 80% of trading profits up to a maximum of £2,500 a month.

How long does the scheme run: Three months (March to May), but it may be extended.

When can claims be made: The application portal opens in phases between 13 and 18 May.

When will grants be paid: By 25 May or within six working days of claim.

Who makes the application: Claims have to made by the taxpayer themselves and cannot be made by agents.

Who does the calculations: HMRC does all the calculations needed for the claim, using the information in the submitted tax returns. The taxpayer does not have to provide any figures.

Is the grant taxable: Yes, the grant is subject to income tax and self-employment national insurance contributions. HMRC’s policy intent (subject to legislation being enacted) is that the grant is taxable when received and there is no requirement to allocate the grant to the months to which it nominally relates (March to May). HMRC does not expect any element of the grant to be reported on 2019/20 self assessment tax returns.

Eligibility criteria

Claims can be made by self-employed individuals or members of a partnership where the taxpayer:

  • has submitted their self assessment tax return for the tax year 2018/19 by 23 April;
  • traded in the tax year 2019/20;
  • intends to continue to trade in the tax year 2020/21;
  • carries on a trade which has been adversely affected by coronavirus.

HMRC has provided some guidance on the meaning of ‘adversely affected’.  This includes being unable to work because the taxpayer is shielding, self-isolating or is on sick leave or has care responsibilities because of coronavirus. It also includes scaling down or temporarily stopping trading because the supply chain has been interrupted, the business has fewer or no customers or staff are unable to work.

The lack of any mention of specific, measurable reductions in income is intentional. The taxpayer should keep evidence of the impact on their trade, but there is no link between the amount of the grant and the financial loss. 

The scheme specifically allows a claim where the trade has continued, so long as the trade is ‘adversely affected’. During the application process, the taxpayer is asked to confirm that they meet the eligibility criteria, but the importance of the questions may be missed by some and others may worry about them unnecessarily.

The taxpayer's trading profits must also be no more than £50,000 and more than half of their total income for either:

  • the tax year 2018/19; or
  • the average of the tax years 2016/17, 2017/18, and 2018/19.

The amount of the grant is based on the average trading profits for the relevant years. Examples are available in HMRC’s guidance. Note that the grant is calculated using the trading profits shown on the tax returns; no adjustment is made if the taxpayer traded for only part of a tax year.

HMRC has published guidance for those with particular circumstances.

How to apply

From 4 May HMRC contacted those who it believes may be entitled to claim for a SEISS grant. HMRC is also providing an eligibility checker.

However, HMRC will not necessarily know whether the taxpayer meets all the conditions of the scheme and the result is subject to meeting the eligibility criteria mentioned above.

The SEISS application portal opens to taxpayers on a staged basis between 13 and 18 May, with the portal opening on different days for different taxpayers. Taxpayers log in to their government gateway account (or select the option to create an account) to complete the application process, including making a declaration that they meet the eligibility criteria.

HMRC will check the claim and expects to make payments by 25 May 2020 or within six working days of the application being submitted.

HMRC is warning taxpayers that they must make the claim themselves. If an agent or adviser attempts to make a claim on behalf of a client this will trigger a fraud alert and the taxpayer will have to contact HMRC. This will cause a significant delay to payment.

Latest news

Those who miss out on SEISS

  • Started self-employment or joined a partnership since 5 April 2019.
  • Self-employment or partnership income of more than £50,000.
  • Trades incorporated since 5 April 2019.
  • Rely on income from property including furnished holiday lettings.
  • Income from employment, property or other sources which is more than the self-employment or partnership income, breaching the 50% test .
  • Earnings reduced because of parental leave or illness in base period .
  • Didn’t file their 2018/19 self assessment return by 23 April 2020.

Digitally excluded

Those who are digitally excluded and unable to claim online can make claims by phoning HMRC’s SEISS helpline.

The HMRC adviser will talk the taxpayer through the calculation over the phone when the claim is made; the adviser has access to the same screens and calculation shown to taxpayers claiming online.

The HMRC adviser can go back to the calculation after the claim has been submitted and, on request, will send a printout of the calculation and the claim to the taxpayer.

Legislation

The legislation that enacts the SEISS is The Coronavirus Act 2020 Functions of Her Majesty’s Revenue and Customs (Self-Employment Income Support Scheme) Direction. The direction was signed by the Chancellor on 30 April 2020.

Help and support

HMRC

The key function of HMRC’s SEISS helpline is to provide support to those unable to make claims online. The helpline is available for other SEISS related queries, but demand is likely to be high and it should be used only where it has not been possible to resolve queries or request a review using the online systems and guidance.   

HMRC has asked that webchat be used in preference to phoning, to help it manage demand. 

ICAEW

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Further support

HMRC support on SEISS

HMRC's phone line should only be used where it has not been possible to resolve queries using online support. HMRC asks that webchat be used.

Support for ICAEW members

The best way to contact ICAEW for real-time support is via live web chat. (Monday to Friday: 9am to 5pm, Wednesday: 10am to 5pm)