What is the Self-Employment Income Support Scheme (SEISS)?
On March 26, after continuous lobbying by Bectu and other unions and self-employed groups, the consultant announced the Self-Employment Income Support Scheme (SEISS) program, a new program designed to support self-employed workers whose income is affected by the COVID-19 virus.
To qualify for the program, you must file a tax return for the 2018/19 tax year as an independent worker or a member of a partnership.
In addition, to qualify for SEISS, your annual business income must be less than £50,000. Moreover, you must earn at least 50% of your income from self-employment. Your business profit will be determined with reference to your income in 2018/19 or the average income of the three years ending in 2018/19. You must also prove that your business has been negatively affected by the coronavirus.
Please note that individuals who work through a personal service company (PSC) will not be eligible for support through this system. Although it is possible to use the retention system if you work through PSC and pay part of the fee through PAYE.
Self-Employment Income Support Scheme (SEISS) Login
SEISS will pay two Grants to eligible freelancers. HMRC will determine your eligibility based on your tax return and will contact you to inform you whether you can apply. The first grant application system was launched on May 13, 2020, and will be closed on July 13.
The first Grant will pay 80% of the average income within three months, up to a maximum of £7,500. The Grant will give in a lump sum. The second Grant will be smaller and will cover 70% of the three-month average income, up to a maximum of £6,570. Application for the second Grant will start in August. Furthermore, more detailed information about the second Grant will publish in mid-June. Please note that you do not need to apply for the first grant to apply for the second Grant.
The Grant is taxable but does not need to be repaid. You can continue to trade and/or accept other jobs while receiving the grant.
How to apply for SEISS Grant?
Update: The information in this article is related to the third SEISS Grant, which lasts for three months, covering November 2020 to January 2021. For more information about the eligibility criteria of the system and its value, please visit the “FAQ” page.
If you are self-employed and infected by the coronavirus, you may eligible to apply for funding through the Self-Employment Income Support Program (SEISS). The program was first opened in May and is equal to 80% of the previous average monthly transaction income of eligible people. The second 70% grant was opened in August, and applications are closed on October 19. From November 30th, the third SEISS Grant login (80% worth) will be available-see below for more information.
Expansion of self-employment income support programs
Since then, the Prime Minister announced that the plan will spread two more times, from November 2020 to April 2021, for a period of six months. Although these new grants are expected to account for 20% of the previous average monthly trading profit, the government announced on October 22.
This amount will raise to 40%, a one-time payment, covering 3 months of profit, with a maximum total of £3,750. However, after the recent reintroduction of national lock-in measures and maintaining a level of support. Roughly comparable to the extended period of the holiday plan, it has now been confirmed that the third grant will again equal to 80% of the previous trading profit, reaching the highest ceiling. 7,500 pounds.
Application procedures for the third SEISS Grant
The online services of the following Grants will available from November 30, 2020, and you must apply for them on or before January 29, 2021. This is a step-by-step guide on how to apply after opening.
Check if you are eligible for SEISS Grant
The SEISS Grant Expansion Program is open to self-employed individuals who were previously eligible for the first and second grants. As a reminder, there are several eligibility requirements:
You must trade in the 2018 to 2019 tax year and have submitted a self-assessment tax return on or before April 23, 2020. In that year-new self-employed person who does not have an 18/19 tax return are not eligible
Also, you must trade in the 2019 to 2020 tax year
You should plan to continue trading in the 2020-2021 tax year
Your trading profit must not exceed £50,000 and at least equal to your non-trading profit. (e.g., based on self-assessment tax returns from 2018 to 2019)
Limited liability company directors are not eligible
If you are a reserve soldier or have recently given birth to a child, you should also pay attention to some other qualification warnings and explain them here.
However, the advertising standards of the third SEISS Grant login have undergone major changes.
Find new advertising guidelines in SEISS
In SEISS 1 and SEISS 2, your business is only “adversely affected”-broadly speaking, this means that any negative impact due to Covid-19 can make you eligible for the program. For example, increase the purchase of PPE / Equipment, manual reduction or cancellation or postponement of items; or work interruption due to illness, self-isolation or nursing/protection. You must also say that you intend to continue trading.
For SEISS 3, there are two changes.
First, your business must “low demand” or “untradeable” from the coronavirus during the SEISS 3 qualification period (November 1 to January 31).
Second, “You must determine whether the impact on your business will significantly reduce the operating profit you report for the tax year.
In other words, you must not only prove that there was low demand or inability to trade between Nov to Jan.
Also, you must “have a reasonable belief”, which means that your income will lower than your income for the entire tax year. About her.
Unfortunately, HMRC does not provide any clear definition of what constitutes a “significant drop” in trading profits.
HMRC stated that this decision cannot be made for a business because it must take into account personal and broader business conditions. (I have posted some examples online here) and it requires an “honest evaluation”
Fact note
What needs special attention here is that-unlike SEISS 1 and SEISS 2-SEISS 3 is a forward-looking test. Based on the reduction of trading profits in the “base period” (the tax year you report in March or April).
Therefore, to file a claim, you must consider whether the reduction in demand from November 1 to January 30. Also, it will significantly reduce trading profits for the entire March/April tax year (this depends on your reporting period).
For this reason, HMRC said: “Before submitting a claim, you should wait until you have a reasonable belief that your trading profit will greatly reduce.”
Therefore, if you are not sure whether you are eligible when you open the Grant application in November. You may have to wait until late January (the last chance is January 29) before you submit your application.
But what can be considered “low demand” or “untradeable”?
For the former, HMRC said, this applies to situations where your business is “affected by reduced demand, activity or capacity from the coronavirus”. Such as fewer customers, cancellation of contracts, and fewer jobs. However, it is obvious that if the purchase of masks or cleaning supplies, etc., the only effect on the company is to increase costs, it should not claim. Simply increasing costs without losing business cannot constitute a valid proposition.
If you are temporarily unable to conduct business activities due to the coronavirus during the qualifying period. (for example, you were forced to close due to protection or self-quarantine restrictions or instructions, and you proved to a positive result and unable to work). The term “unable to trade” applies Because of your responsible care. The only unimportant exception is whether you have returned to the UK from foreign travel.
Collect evidence for your SEISS claim
In order to file a claim, you must prove that the coronavirus pandemic and the simultaneous lockdown have a negative impact on your business.
As mentioned above, the criteria for the first grant and the third grant have hardly changed. You must declare that your business was affected by the decline in demand caused by COVID-19 during the qualification period. (November to January). Furthermore, not simply “negatively affected”, and you must reasonably believe that this has been Leading your trading profits from the entire tax year.
Therefore, it is worth keeping some evidence about the impact of Covid-19 on your business.
To prove that the demand you are facing has decreased, examples of evidence include:
- Business accounts show less activity than in previous years
- Record of reduced or cancelled contracts or dates
- Fewer bills
- Record the date when demand or capacity decreased due to government restrictions
If your business is temporarily unable to trade, you must retain the following evidence:
- Record the date you were forced to close due to government restrictions
NHS testing and tracking communications. If you are instructed to self-quarantine in accordance with NHS guidelines. Plus cannot work from home (it does not matter if you are abroad and must self-quarantine)
- Letter or email from the NHS asking you for protection
- Test results (if you are diagnosed with coronavirus)
- If you are responsible for childcare, a letter or email from your child’s school
Submit a SEISS claim
You must file the claim yourself, not on your behalf. To apply, you will need:
The only taxpayer self-assessment reference (UTR)
Your national insurance number
Government portal username and password if you don’t have an existing username, you can create one when prompted
Your bank account details in the UK, including bank account number, classification code, account name, and address associated with your bank account
You must submit a claim on or before January 29, 2021.
A link to submit a claim can found on the government website
Get SEISS Grant
The payment of claims and grants will checked in your bank account within 6 working days. You will receive an email after the payment has started.
If you are still not sure about the requirements, you can access the entire GOV.UK SEISS guide here.
At IPSE, we understand the frustration of major freelancers. Such as directors of limited liability companies and new self-employed individuals who are included in the program. We are working hard to change this: learn more about our work here.