Coronavirus Self-Employment Income Support Scheme (SEISS)
Updated 20 May 2020
The coronavirus pandemic has turned businesses all over the world upside down.
Governments in the UK and abroad have rushed to prop up businesses and employees with tax credits and grants. Self-employed workers often get left behind in these schemes.
This time around is different in the UK, with Chancellor Rishi Sunak unveiling the Coronavirus Self-Employment Income Support Scheme (SEISS) to help close to 5 million self-employed workers.
Read this guide to find out if you’re eligible and how you can make your claim.
What Is the Coronavirus Self-Employment Income Support Scheme (SEISS)?
This is a taxable grant provided by the government that will cover 80% of your average profits from self-employment over the last three tax years. The grant has a maximum of £2,500 per month and will last for three months, though it could be extended.
In order to be eligible, you must meet the following requirements:
Your self-employment profits must be less than £50,000 and make up at least 50% of your total income for the year.
You may be able to average profits from the 2016/2017, 2017/2018, and 2018/2019 tax years in order to qualify.
If you’re self-employed and you collect a salary from a company through PAYE, you are not eligible for this support. You can find other means of support through the Coronavirus Job Retention Scheme.
What if you were self-employed for only two years and not three? As long as you filed taxes showing self-employment income, you should qualify.
If you haven’t filed your taxes for the 2018/2019 tax year, it is too late to file and be eligible for the income support scheme.
How to Apply for Income Support
Starting on May 13, 2020, HMRC will have an online system available for self-employed workers to make a claim.
If you are eligible, HMRC will notify you as to when you can make your claim.
You will need to have a few items when you file a claim online. You need your Self-Assessment UTR, National Insurance Number, Government Gateway login information, and bank account to receive the deposit.
Once your claim is approved, you can expect to see the funds in 6 working days.
More Self-Employed Financial Support
What if you find that you’re not eligible for SEISS?
There are other possibilities for support in the form of loans and other grants.
UK-based businesses can apply for a Bounce Back Loan. This is a loan that is backed 100% by the government and has no fees or interest for the first 12 months of the loan. The interest rate is 2.5%.
You can borrow between £2,000 and 25% of your turnover up to £50,000.
If you can’t wait for SEISS funds to arrive, you can also apply for a Coronavirus Business Interruption Loan. The government will guarantee 80% of the loan.
You have to show that you have a profitable business and the coronavirus pandemic had a negative impact on your earnings.
Help for the Self-Employed Due to Coronavirus
Self-employment is always a risky venture. In times like we’re facing now it is full of uncertainty.
Fortunately, there is help on the way. The Coronavirus Self-Employment Income Support Scheme (SEISS) is designed to help you recover 80% of your profits for three months.
Do you have any questions about SEISS or any other financial support for self-employed workers?
Contact us today for help and advice.
How KG Accountants can help
- Help and assist you to fully comply with the government guidelines on managing the risk of Covid19.
- Forecasting – both for your own planning and for the business loan applications.
- Help prepare simple cash flow monitoring tool to ensure your road to recovery is as smooth as possible.
- How to set up a payment plan with HMRC.
- Businesses who have negotiated a rent holiday.
- Our regular blog on how you can get funding during this pandemic.
- Everything you need to know on the Coronavirus Job Retention Scheme (CJRS) and furloughing.
- Managing your personal finances – our financial planning team’s top tips.
- If there’s anything else you need help with not listed above, please ask, and we’ll find a way.
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