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Self-employment Income Support Scheme

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

Those eligible should have received a letter, email or text message from HMRC with information about how to make an online claim now that the SEISS has opened. Money should hit bank accounts by May 35 or six working days after a claim is made. 

The Self-Employment Income Support Scheme will offer a taxable grant of up to 80 per cent of a self-employed person’s income based on their taxable profits over the past three years, capped at £7,500 over a three-month period. It only covers those who paid tax on trading profits of up to £50,000 of income in 2018-19. 

The Treasury estimates that just over half of the roughly 6m self-employed will benefit from the Self-Employment Income Support Scheme.  

Self-Employment Income Support Scheme at a glance 

  • Same level of support as PAYE employees who face redundancy because of coronavirus 
  • Up to 80 per cent of typical earnings capped at £7,500 altogether. Income tax and national insurance still payable 
  • Open to anybody with income up to £50,000 according to their 2018-19 tax return 
  • Money paid by HMRC straight into your bank account – no need to contact taxman 
  • Available to people who make the majority of income from self-employment 
  • Only those who have – or are about to make a tax return for 2018-19 tax return – can apply
  • The coronavirus self-employed rescue package is based on Norway’s scheme, which pays self-employed people 80 per cent of their average earnings over the previous three-year period.
  • The self-employed make up 15 per cent of the UK workforce and represent a sector worth an estimated £305bn in 2019. 

What do I do now? 

  • Check your prior year tax returns to assess whether you are eligible on the majority trading and £50,000 trading profit conditions 
  • Get your tax return for 2018/19 filed if you have not yet done so (by 23 April 2020) 
  • Consider other help you may be eligible for as a self-employed worker 
  • If you haven’t heard from HMRC in the next few weeks and you believe you are eligible then do make your application to HMRC for the grant. HMRC will be checking your eligibility against its records and there will certainly be some who are in danger of missing out.  

How much you’ll get 

You’ll get a taxable grant based on your average trading profit over three tax years: 

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

HMRC will calculate your average trading profit by adding together your total trading profits or losses for the three tax years, divided by three. 

The grant will be 80 per cent of your average monthly trading profits, paid out in a single instalment covering three months, and capped at £7,500 altogether. 

The grant amount we work out for you will be paid directly into your bank account, in one instalment. 

Documents you will need to make a claim 

You will need: 

  • Self Assessment UTR 
  • National Insurance number 
  • Government Gateway user ID and password 
  • bank account number and sort code you want HMRC to pay the grant into (only provide bank account details where a Bacs payment can be accepted) 

What if I’m a self-employed with my own company?

The Self-Employment Income support scheme does not cover the 1.8m who are owner-managers of their companies, paying themselves mostly through dividends. 

Owner-directors typically structure their accounts so they receive around £800 per month via pay-as-you-earn (PAYE) but take the majority of their income as taxable dividends. 

What if I have only just become self-employed? 

The chancellor has said the rescue scheme will only be open only to those self-employed who have filed tax returns for the 2018-19 tax year, in order to minimise fraud. 

Government calculate at least 150,000 newly self-employed workers will be unable to make claims under the scheme because it is only open to people who filled in a tax return for 2018/19.  

Left out of Self-Employment Income Support Scheme

An estimated 2 million self-employed people are ineligible because they have trading profits above a cap of £50,000; draw less than half their income from self-employment; or have not been trading for long enough to have filed the tax returns on which grants are based. 

You can find out more about the scheme rules and apply  at GOV.UK 

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