Support for Self-employed - Frequently Asked Questions
How much will I get?
The Self-employment Income Support Scheme (SEISS) will support self-employed individuals (including members of partnerships) who have lost income due to coronavirus (COVID-19).
- This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed.
- Support will be based on 3 years average profits up to the 2019 return.
Who will qualify?
You can apply if you’re a self-employed individual or a member of a partnership and you:
- have submitted your Income Tax Self Assessment tax return for the tax year 2018-19
- traded in the tax year 2019-20
- are trading when you apply, or would be except for COVID-19
- intend to continue to trade in the tax year 2020-21
- have lost trading/partnership trading profits due to COVID-19
Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment. This is determined by at least one of the following conditions being true:
- having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
- having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period
If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return. If you have not yet submitted your 2019 return (its overdue), you have until 23 April to make a late return which will be considered.
What are trading profits for the scheme?
Further detail revealed on 14 April 2020 showed how HMRC will calculate profits for the purposes of the scheme. The main point is that where the self-employed person has purchased capital items in a year this will be deducted to arrive at “trading profits” for the scheme, so for instance a builder making £30,000 in his first year but buying a £20,000 van will only have £10,000 profit.
Trading profits will be based on 3 years or less to 2019 averaged :
Less all the normal allowable expenses (Office, travel, staff, premises, finance etc) ;
Less any capital allowances claimed (e.g. if you bought a van or computer).
For full details of how profits will be calculated click on the link here.
Can I work and still receive a grant?
If you are continuing to work but have lost profits you will be able to claim, this is unlike the furlough scheme for employees which requires employees to cease all work.
Will it be taxable?
The grant will also form part of any taxable profits for the 2020/21 tax year, so may in effect be taxed.
How can I apply?
HMRC should invite you to apply, applications open 13 May 2020, you will need a personal tax account to claim the grant, see our email for details of your Tax reference and national insurance number
How will this affect future tax?
The chancellor warned that in the future the self employed may pay tax in line with the employed due to the level treatment in this crisis.
Link to government guidance: