At the beginning of the pandemic, it seemed as though the government had forgotten about the self-employed as they were offered little to know support. This led to a lot of panic for the self-employed and sole-traders since, in many cases, they had no access to income. Eventually, this changed with the introduction of the Self-Employment Income Support Scheme (SEISS). This scheme was met with mixed reviews upon its arrival; on the one hand, it offered the self employment some support which they sorely needed, but on the other, the support was seen by many to be too little too late and unfairly low compared to the amount furloughed workers on the Employee Retention Scheme were entitled to. Since then though the government has made major changed to SEISS and made it much more beneficial to those who need it.
Originally, the government announced the Self-Employment Income Support Scheme in late September. The scheme was set to run for two 3-month periods, the first running from November 2020 to January 2021 and the second from February 2021 to April 2021.
For the first 3 months, the government said they would provide a taxable grant covering 55% of average monthly trading profits for 3 months. The 55% derived from the fact that the government originally intended to pay 80% of profits for November, in order to keep this scheme in line with the Employee Retention Scheme, and then 40% for the two remaining months. This was to be capped at £5,160 in total.
However, after heavy backlash and the implementation of a second lockdown the government increased both the length of the scheme and also the amount those who applied would receive.
The first instalment of the scheme will now cover 80% of trader profits, rather than the aforementioned 55% (capped at £7,500).
The government also announced a further payment. The additional payment will cover a three-month period from the start of February until the end of April. The Government has indicated that they will review the level of the fourth grant and set this in due course. It has not yet been confirmed when claims for this fourth grant will be open.
Who Can Apply And How They Can Do It
In order to be eligible for the grants, an individual has to carry on a trade which has been adversely affected by COVID-19. When looking at whether a trade has been adversely affected, there is no specific monetary threshold, and no requirement for income or profits to have fallen by a certain amount. Instead, HMRC gives the following examples of how a business could be adversely affected by COVID-19; 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
Or you’ve had to scale down or temporarily stop trading or incurred additional costs because:
- your supply chain has been interrupted
- you have fewer or no customers or clients
- your staff are unable to come in to work
- one or more of your contracts have been cancelled
It is worth making absolutely sure your situation matches at least one of these criteria before applying as the HMRC may require you to provide sufficient evidence of the adverse effects. It is also worth bearing in mind that you can’t apply based on the presupposition of an adverse effect; you must be experiencing it at the time of your claim.
What is good to note as well is that, unlike the furlough scheme, you are able to continue working and even work elsewhere once you receive the support.
To claim, you will need your
- Self Assessment Unique Taxpayer Reference (UTR)
- National Insurance number Government Gateway user ID and password
- UK bank details including account number, sort code, name on the account and address linked to the account
Only provide bank account details where a Bacs payment can be accepted. You may also need to answer questions about your passport, driving licence or information held on your credit file.
To begin your claim click HERE. You will need to submit you UTR to begin.
The deadline is the 29th of January 2021 – so be quick!
In what ways has your business been affected by the Coronavirus? Let us know in the comments section below, or by sharing this article on social media!
At J&P, helping small businesses is our passion, and we understand that individual traders and self employed persons across the UK are at risk now more than ever. We would be more than happy to provide you with accounting and taxation services, such as UTR application, self assessment tax returns, and Self-Employment Income Support Scheme advice and support. We are here to help you through the Coronavirus crisis, so please do not hesitate to give us a call on 0161 637 1080 or send an e-mail to firstname.lastname@example.org.