Self-employed can now make a claim through the Self-Employment Income Support Scheme
The retail sector has been affected in many ways, with essential businesses having been allowed to stay open and non-essential having to temporarily close their doors. Others, such as restaurants, have diversified to offer takeaway and delivery services. The Government promised that there would be support for those in the self-employed sector who are adversely affected by the coronavirus pandemic, which would come into effect in June. The details of the Self-Employment Income Support Scheme (SEISS) are now available and here we explain the eligibility criteria for making a claim, the amount you can expect to receive, how to make claim and when you will receive your grant.
Who can claim a grant from Self-Employment Income Support Scheme?
If you are self-employed or a member of a partnership, all of the following must apply:
- You traded in the tax year 2018 to 2019 and submitted your Self Assessment tax return on or before 23 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 trade has been adversely affected by coronavirus
What constitutes your business being adversely affected?
This could include if you are shielding a vulnerable person, are self-isolating or are on sick leave because of the virus, or you have had to scale down your operations or temporarily stop trading. This may be because your supply has been interrupted, you have fewer or no clients, or your staff cannot come to work.
Any evidence that your business has been adversely affected should be kept:
- Business accounts showing a reduction in turnover
- Confirmation of any coronavirus-related business loans you have received
- Dates your business had to close due to lockdown restrictions
- Dates you or your staff were unable to work due to coronavirus symptoms, shielding or caring responsibilities due to school closures
How to check if you are eligible to make a claim?
This is quite straightforward and you can check online or ask your accountant or tax agent to do it for you. You just need two pieces of information, your Unique Taxpayer Reference (UTR), which can be found on your tax returns and on other letters relating to your tax affairs as well as your National Insurance number. If you are eligible, you’ll be informed of the date you can make the claim and be asked for contact details.
You might not be eligible if any of the following apply:
- Your trading profits are over £50,000 per year
- Your trading profits are less than your non-trading income
- You did not submit your Self Assessment tax return for 2018 to 2019 on or before 23 April 2020
It is estimated that 2m people will be ineligible because their trading profits are above £50,000, they draw less than half their income from self-employment or they have not been trading long enough to file tax returns.
How to check if you are eligible to make a claim?
Whilst waiting for the grant, you may be able to claim Universal Credit, your Self Assessment Income Tax and VAT will be deferred. Grants are available for businesses that pay little or no business tax, and you could apply for the Business Interruption Loan Scheme or a Bounce Back Loan.
How your grant for Self-Employment Income Support Scheme (SEISS) will be worked out
It will be based on your average trading profit over the three tax years (2016-2017, 2017-2018, 2018-2019). The grant will then be 80% of your average monthly trading profits, up to a maximum of £2,500 per month. This will be paid out to cover three months in a single payment, capped at £7,500.
How to make a SEISS claim?
- Government Gateway user ID and password – if you do not have a user ID, you can create one when you check your eligibility or make your claim
- UK bank details (only provide bank account details where a BACS payment can be accepted) including:
- Bank account number
- Sort code
- Name on the account
- Your address linked to your bank account
When to expect your Self-Employment Income Support Scheme (SEISS)
Your claim will be checked and you should expect your monies in your account in six working days. You will be notified by email when your payment is on its way. You can check the status of your claim at any time.
Summary of the Self-Employment Income Support Scheme (SEISS)
It is expected that 3.5m self-employed people could be eligible for the cash grant, which is worth up to £7,500 over three months, although that period may be extended. If you are eligible, you should have now received a letter from the Government. You will be required to keep records of the amount you have claimed and also produce evidence that your business has been affected adversely.
What can The Retail Mutual do for your business if you are self-employed?
The Retail Mutual understands that this is a difficult and frustrating time for people working on a self-employed basis. If you have any questions about cover you have with us, our experts are looking forward to speaking with you. We are still experiencing a high number of calls, and so your patience is appreciated at this time. Please refer to our coronavirus resource hub for more information about other financial help that is available to retail businesses.