- The revised Self-Employment Income Support Scheme (SEISS)
- DBGS – The Discretionary Business Grant Scheme
The revised Self-Employment Income Support Scheme (SEISS)
If you’re self-employed or a member of a partnership and have been adversely affected by Coronavirus the Treasury has issued some updated guidance and regulations on the Self-Employment Income Support Scheme (SEISS), which makes their existing support more generous. In this Bulletin you can find out if you can now use this revised scheme to claim a grant. In the first instance, HMRC will contact you directly.
The SEISS scheme will allow you to claim a taxable grant of 80% of your average monthly trading profits, paid out in a single instalment covering 3 months, and capped at maximum total of £7,500. This is a temporary scheme, but it may be extended further as the Coronavirus situation develops.
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. The grant will be subject to Income Tax and self-employed National Insurance. HMRC will work out if you’re eligible and how much grant you may get.
Who can claim SEISS?
You can claim if you’re a self-employed individual or a member of a partnership and:
- you carry on a trade which has been adversely affected by Coronavirus
- you traded in the tax year 2018 to 2019 and submitted your Self-Assessment tax return on or before 23rd April 2020 for that year
- you traded in the tax year 2019 to 2020
- you intend to continue to trade in the tax year 2020 to 2021
Your business could be adversely affected by Coronavirus, for example if:
- you’re unable to work because you:
- are shielding
- are self-isolating
- are on sick leave because of Coronavirus
- have caring responsibilities because of Coronavirus
- you’ve had to scale down or temporarily stop trading because:
- your supply chain has been interrupted
- you have fewer or no customers or clients
- your staff are unable to come in to work
You should not claim the grant if you’re above the state aid limits or operating a trade through a trust.
To work out your eligibility HMRC will first look at your 2018 to 2019 Self-Assessment tax return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income. If you’re not eligible based on the 2018 to 2019 Self-Assessment tax return, HMRC will then look at the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019.
Grants under the Self-Employment Income Support Scheme are not counted as ‘access to public funds’ and you can claim the grant on all categories of work visa. Your tax agent or adviser cannot make the claim for you. You must make the claim yourself. If you use an agent you should contact them if you need any help or support.
How different circumstances affect the scheme
Check if your circumstances affect your eligibility, for the following:
- if your return is late, amended or under enquiry
- if you’re a member of a partnership
- if you’re on or took parental leave
- if you have loans covered by the loan charge
- if you claim averaging relief
- if you’re non-resident or chose the remittance basis
- if you’re above the state aid limits
Check if you’re eligible to claim SEISS
Use the HMRC online tool to find out if you’re eligible to make a claim. Your tax agent or adviser can also use the online tool on your behalf. To check your eligibility you’ll need your:
Self-Assessment Unique Taxpayer Reference (UTR) number – if you do not have this find out how to get your lost UTR number
National Insurance number – if you do not have this find out how to get your lost National Insurance number
If you’re eligible
HMRC will contact you and tell you the date you’ll be able to make a claim from; they’ll also ask you to add your full contact details. They will use these to remind you when the online service will be available.
If you’re not eligible
If HMRC tell you that you’re not eligible to make a claim, you can ask them to review this after you’ve used the online tool. If you want to do this at a later time, you’ll be able to use the online tool more than once.
How much you’ll get
You’ll get a taxable grant based on your average trading profit over the 3 tax years:
- 2016 to 2017
- 2017 to 2018
- 2018 to 2019
HMRC will work out your average trading profit by adding together your total trading profits or losses for the 3 tax years, then divide it 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 a maximum total of £7,500. The online service will tell you how the grant has been worked out. Once calculated, the grant amount will be paid directly into your bank account in a single instalment. Find out how to work out your average trading profits including if you have not traded for all 3 years.
How to claim SEISS
The online service will be available from 13th May 2020. If you’re eligible, HMRC will contact you and tell you the date from which you can make your claim. If your claim is approved you’ll receive your payment within 6 working days. If you’re unable to claim online an alternative way to claim will be available. We’ll let you know when we have details of alternative methods of claiming. You do not need to contact HMRC right now; if you do so, it may actually cause additional delays.
When you make your claim
You’ll only need your:
- Self-Assessment UTR – if you do not have this find out how to get your lost UTR
- National Insurance number – if you do not have this find out how to get your lost 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
- Bank account number and sort code you want HMRC to pay the grant into (only provide bank account details where a BACS payment can be accepted)
You’ll 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’re below the state aid limits. HMRC will check claims and take appropriate action to withhold or recover payments found to be dishonest or inaccurate.
After you’ve claimed
Once you’ve 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’re working 16 hours a week for any tax credits claims
When you have made your claim, and if you cannot get any help you may need online, you can contact HMRC directly; however, at this current stage in the claim process you should not yet contact them.
DBGS – The Discretionary Business Grant Scheme
The Government has established a new discretionary fund of £617 million that has been set up to help some small businesses that were previously outside the scope of the existing business grant funds schemes. The additional money will be made available via Local Authorities; the exact amounts for each Council area will be announced in w/c 11th May and the allocation of funding will be at the discretion of Local Authorities.
Who will benefit?
The DBGS is aimed at small businesses with ongoing fixed property-related costs. Councils will be asked to prioritise businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for Small Business Rates Relief, and bed and breakfast operators that pay council tax rather than business rates. In addition, Councils may choose to make payments to other businesses based on local economic needs.
What are the rules?
Businesses must be small (under 50 employees) and they must also be able to demonstrate that they have seen a significant drop in income due to Coronavirus restriction measures. The three payment levels will be:
- The maximum grant will be £25,000
- There will also be grants of £10,000
- Councils will have discretion to make payments of any amount under £10,000 to suit local circumstances
How do I apply?
We will issue information on how to apply next week when the DBGS goes live.
We will issue further advice and guidance Bulletins as the Covid-19 situation develops.
Sir Henry Boyle
1200 hrs 5th May 2020