The Self-Employed Income Support Grant - How to see if you are eligible
12th May 2020
In the current situation, there are a range of different grants, loans and support for businesses, all aimed at different sectors or business types. On 4th May, HMRC updated their guidance outlining the process for applying for SEISS.
As the name suggests, this grant is aimed at the Self-employed. This is available for people who filed a self-assessment tax return for 2018/19 and to qualify your profits must be less than £50,000 and make up more than 50% of your income. If you fail that test for 2018/19, then the same test is applied to average over the last 3 tax years.
HMRC will work out your average trading profit by adding together your total trading profits or losses for the 3 tax years, then they will divide by 3.
The grant will be 80% of your average monthly trading profits, paid out in a single instalment covering 3 months, and capped at £7,500 altogether. It will be paid directly into your bank account, in one instalment but it will be subject to Income Tax and self-employed National Insurance.
If you receive the grant you can continue to work, start a new trade, or take on other employment including voluntary work, or duties as an armed forces reservist.
HMRC will work out if you are eligible and how much grant you may get via the online process.
Are you eligible for SEISS?
HMRC have an online eligibility checker which links from their web page: https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference
You'll need a Government Gateway Account. If you do not have one then you can obtain one through the Eligibility tool which HMRC have set up. Failure to have a Gateway ID will delay your ability to make a claim.
- When you click on the link it will ask for your UTR and then National Insurance number.
- Once that is put in, the online tool should advise whether or not HMRC think you are eligible for the scheme.
- If you are, HMRC will ask you to add your contact details as they will use this to tell you when to claim and what you need to do beforehand.
- When you click through at that point, the online tool will ask for your Gateway ID and password.
- If you haven’t got it, then you can request a Gateway ID via the online tool.
If the system tells you that you are not eligible to make a claim, and you believe you should be, you can ask HMRC to review this.
Once you have checked your eligibility, if you are eligible for the Grant, HMRC will ask for your contact details and they will email you between the 13 and 18 May. The HMRC portal opens on different days for different taxpayers.
Making your claim
You will need your:
- Self-Assessment UTR
- National Insurance number
- Government Gateway user ID and password - if you do not have a user ID, you can create one when you check your eligibility online (see above)
- Bank account number and sort code you want to pay the grant into
You will have to confirm to HMRC that your business has been adversely affected by coronavirus.If you claim the grant HMRC will treat this as confirmation you are below the state aid limits.
After you have claimed
Once you have submitted your claim, you will be told straight away if your grant is approved. HMRC will pay the grant into your bank account within 6 working days.
You must keep a copy of all records in line with normal self-employment record keeping requirements, including:
- the amount claimed
- the claim reference number for your records
- evidence that your business has been adversely affected by coronavirus
You will need to report the grant:
- on your Self-Assessment tax return
- as self-employed income for any Universal Credit claims
- as self-employed income and that you are working 16 hours a week for any tax credits claims
Inevitably, applications for this grant will be high (which is why the application dates will be staggered - to manage the load on the system) so it is worth getting all your papers together ready for when your window opens and be on the lookout for that all important email.
If you want to know more about the range of government assistance for businesses and how having an accountant can help you at times like this, please contact us.