Our previous blog post provided some bullets with key takeaways from the Chancellor’s announcement on the Government’s support package for the self-employed. A week in, and many queries later, we thought it would be useful to share some more details on the scheme.
The Self-Employed Income Support Scheme (or SEISS) offers a grant of up to 80 percent of a self-employed person’s income. This grant is taxable and based on profits over the past three years. Similar to the business support scheme, the grant will be capped at £2,500 per month. It will only be available to those individuals who paid tax on trading profits of up to £50,000 worth of income in the tax year 2018-2019.
The scheme will be available from the beginning of June with an initial three-month lifespan. People are asked not to contact HMRC but wait to be contacted to complete an online form. The grant will be paid directly into the individual’s bank account and the scheme will cover up to 80% of average profits over the past three years, up to £2,500 per month, for at least three months.
The scheme is estimated to help two-thirds of Britain’s estimated 6 million self-employed. While there is some time until the scheme starts, if your work has already been affected as a result of COVID19, or you are expecting a downturn, getting prepared now will help you to have your application ready to submit. We’d suggest the following steps:
If your tax return is still outstanding for 2018/2019, get it filed asap. The deadline is 23rd April 2020.
If you have already filed your tax return, check to see if you are eligible.
Revise your cashflows with the anticipation of a reduced cashflow until June
Wait to hear from HMRC, but if you haven’t heard by mid-April it could be worth proactively contacting them
Consider other financial help now available to the self-employed, for example, Universal Credit
If you are self-employed through a company that you own and receive the majority of your income in dividends, it is important to state that the above does not apply to you. This area is still lacking clarity, with the Institute of Directors calling for an extension of the scheme to Owner Directors, claiming that dividends provide a sufficient paper trail for furlough claims. When we have more details on this, we will let you know.
If you are dealing with any of the above and need assistance, please get in touch to see how we can help on 01274 588115 or firstname.lastname@example.org