Summary of the measures

The Self-employment Income Support Scheme (SEISS) will support self-employed individuals (including members of partnerships) who have lost income due to COVID-19.

Individuals can claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed.

Who is eligible?

You can apply for the scheme if you are self-employed or a member of a partnership and you:

  • have submitted your Income Tax Return for the tax year 2018-19 (if this has not been done this can be filed by 23 April 2020)
  • traded in the tax year 2019-20
  • are trading when you apply, or would be except for COVID-19
  • intend to continue to trade in the tax year 2020-21
  • have lost trading/partnership trading profits due to COVID-19

You will need to confirm to HMRC that your business has been adversely affected by coronavirus. HMRC will as usual use a risk based approach to compliance.

Your trading profits must also be no more than £50,000 and more than half of your total income for either:

  • the tax year 2018 to 2019 •
  • the average of the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019

HMRC will use data on the 2018 to 2019 tax returns already submitted to identify those eligible.

HMRC will not take into account any amendments to submitted returns after 26 March 2020, when working out your eligibility or amount of the grant

How is are my average trading profits calculated?

To work out your average trading profit you will add together all profits and losses for all tax years you’ve had a continuous trade. By way of example, if you made:

  • £60,000 profit in tax year 2016 to 2017
  •  £60,000 profit in tax year 2017 to 2018
  • • £30,000 loss in tax year 2018 to 2019

Add £60,000 and £60,000 then deduct £30,000 loss = £90,000. Then divide £90,000 by 3. Your average trading profit for the 3 tax years would be £30,000.

What is my total income?

Your total income is the total of all your:

  • income from earnings (e.g. employment income)
  • trading profits
  • property income
  • dividends
  • savings income
  • pension income
  • miscellaneous income (including social security income)

How much will I receive?

You will receive a taxable grant which will be 80% of the average profits from the tax years (where applicable):

  • 2016 to 2017
  • 2017 to 2018
  • 2018 to 2019

To work out the average HMRC will add together the total trading profit for the 3 tax years then divide by 3 and use this to calculate a monthly amount.

This amount will be capped at £2,500 per month for 3 months.

The grant will be paid directly into your bank account, in one instalment.

What if I have not submitted Self Assessment tax returns for all 3 years?

HMRC will work out your average trading profit based on continuous periods of self-employment, which will be either:

  • the tax years 2017 to 2018 and 2018 to 2019
  • the tax year 2018 to 2019 only, even if you were self-employed in the tax year 2016 to 2017

The grant will be 80% of your average trading profit, divided by 12 which will give a monthly amount. HMRC will pay this up to a maximum of £2,500 a month.

What do I need to do

You cannot yet apply for this scheme. HMRC will contact you if you are eligible for the scheme and invite you to apply online.

The Chancellor indicated that he would expect payments under this scheme to made in early June 2020.

This amount will be capped at £2,500 per month for 3 months.

Beware!

You can only access this scheme through GOV.UK. If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.

You may find this flowchart useful to determine if you are eligible for SEISS