The Self-employment Income Support Scheme, commonly known as SEISS, is a UK Government scheme that aims to assist self-employed individuals through the financial difficulties arising from the coronavirus outbreak by providing income protection. It does so by making payments to qualifying individuals with a cash grant worth 80% of their average monthly trading profit over the last three qualifying years.
The key features of the SEISS are:
1. Scheme dates – It is a temporary scheme relating to the 3 month period from 1st March 2020 to 31st May 2020. The SEISS may be extended if considered necessary by the Government.
2. Qualifying individuals - The SEISS is available to individuals (whether sole traders, partners or LLP members) whose trading profits (or share of trading profits) are less than £50,000, who have submitted an Income Tax Self-Assessment tax return for the tax year 2018-19 and have traded in the tax year 2019-20. They must intend to continue to trade in the tax year 2020-21, must have lost trading or partnership trading profits due to COVID-19 and more than half of their income must come from self-employment.
3. Non-Qualifying individuals – Individuals who became self-employed after the end of the 2018-19 tax year will not be eligible. Similarly, individuals whose business traded prior to the end of the 2018-19 tax year, but made losses (or no profit) during that period (in line with the SEISS’s calculation methodology) will not be eligible.
4. Working during the SEISS – Self-employed individuals may continue to work whilst they receive support under SEISS.
5. Calculating the SEISS payments – The SEISS payments will be 80% of the average profits from the relevant tax years between 2016 and 2019. The maximum sum payable under the SEISS will be £2,500 per month for the 3 month period from 1st March 2020 to 31st May 2020.
6. Making claims – It is currently intended that HMRC will contact individuals whom it considers are eligible for payments under the SEISS and invite them to apply online.
7. Payments – It is currently expected that HMRC will notify individuals how much they will be paid under the SEISS once HMRC has received and assessed their claims. The SEISS payments will then be made by BACS to the applicant’s UK bank account specified in their application.
8. Opening date – The SEISS is not yet open. It is currently intended that HMRC will start making payments under the Scheme from the beginning of June 2020.