Nobody could have planned for what the UK business community is experiencing during this coronavirus outbreak
There have been so many emergency provisions announced by the government over the last week to try and provide financial support to UK businesses, to ease cash-flow, pay employees, contribute towards property costs and finally some help for the self-employed businesses who find themselves unable to generate enough income as a result of the shut down.
In the fourth part of a series of posts we have summarised below what is available to help the self employed who find themselves unable to work through the crisis.
Whilst the basics still apply to the information below, read our updated post here to see the changes made in Autumn 2020
Self-employment Income Support Scheme
- What support is available?
The Self-employment Income Support Scheme (SEISS) will support self-employed individuals (including members of partnerships) whose income has been negatively impacted by COVID-19. The scheme will provide a taxable grant to self-employed individuals or partnerships, worth 80% of their average profits up to a cap of £2,500 per month.
HMRC will use the average profits from tax returns in 2016-17, 2017-18 and 2018-19 to calculate the size of the grant. The scheme will be open to those where the majority of their income comes from self-employment and who have profits of less than £50,000. The scheme will be open for an initial three months with people able to make their first claim by the beginning of June.
- What do I need to do?
You should not contact HMRC now as they will use existing information to check potential eligibility and invite applications once the scheme is operational.
HMRC will then pay the grant directly to eligible claimants’ bank account. They are working urgently to deliver the scheme; grants are expected to start to be paid out by beginning of June 2020.
- Our Comments
This scheme will not help people who have become self employed during the tax year 2019/20 and the funding won’t come quick enough for businesses who find themselves with no income. However, using a combination of the other measures available such as the deferral of tax payments, time to pay arrangements, deferral of mortgage payments and universal credit changes, individuals may be able to get by in the few months until the grant comes through.
The definition of self employed for this scheme, looks like it will be by reference to whether you complete the self employment pages of a tax return, and does not cover directors who receive a salary and dividends through their limited company.