PHTM COVID-19 FINANCE UPDATE WITH NEW GRANTS AND SCHEMES FOR ALL SELF-EMPLOYED
SELF-EMPLOYMENT INCOME SUPPORT SCHEME (SEISS)
HMRC announce that the portal for the second grant in the SEISS Scheme opens in August 2020.
Support for the self-employed during the Coronavirus crisis: • Two separate taxable grants are claimable: - First grant for the period ending 13 July 2020. - Second grant for the period from 14 July 2020. • The grant payable is the lower of: - £7,500 (if claiming for the first grant), or £6,570 (if claiming for the second grant) and
- 80% of your average monthly profits over the three years 2016/17, 2017/18 and 2018/19* for the first three months, reducing to 70% of the same average profits for the second three months.
• The grant was initially capped for three months and has subse- quently been extended.
• A variation of the second grant was announced on 23 June and applies to new parents.
• The grant is available to self-employed individuals: - With trading profits up to £50,000 per year whose majority of income comes from being self-employed.
- Who have been adversely affected by the Coronavirus crisis. • If you receive the grant you can continue to work or take on other employment including voluntary work.
• You do not have to have claimed the first grant to be able to claim the second.
Claims for the first three months commenced on 13 May 2020, with the first payments arriving from 25 May 2020 and within 6 working days of claims being made.
The deadline for claiming under the first round was 13 July 2020. Claims for the second round of grants at the lower rate may be made from 17 August with a deadline of 19 October 2020. See How to claim under the SEISS below.
Note that: Company directors are employees for PAYE purposes and not self-employed, see Covid-19: Company directors.
If you fail to qualify for the SEISS, it may be possible to apply for funding via the Coronavirus Discretionary Grant Fund. This is administered by Local Authorities and currently was only open for applications between 29 May and 9am 15 June 2020.
OVERVIEW
Eligibility You can claim one or both of the grants, only if your business is 'adversely' affected by the Coronavirus.' To claim the second grant your business must have been adversely affected on, or after, 14 July 2020.
Your business may be adversely affected if any of the following apply:
Restrictions on trading: • Government orders have meant that your trade or industry had to
AUGUST 2020
• One or more of your contracts have been cancelled. • You have fewer or no customers or clients.
Restrictions on you personally: • You have been ill or self-isolating or shielding. • You have had to care for others and this disrupted your work.
Qualifying conditions The same conditions apply to both rounds of grant funding. These conditions relate to eligibility for the grants and not to the amounts you will receive if you do qualify, details of which are set out at 'How will the grant be calculated?'below. You are self-employed and you:
• Have submitted your Income Tax Self Assessment tax return for the tax year 2018-19 on or by 23 April 2020.
• Have 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. You should keep records to support this.
• Average self-employed trading profits between £0 - £50,000.
Additionally, more than half of your total income comes from self- employment. One of the following conditions A to C must be met to be eligible for the scheme
A. Your trading profits/partnership trading profits are between £0 - £50,000 for 2018-19 and those trading profits are more than half of your total taxable income for that year, or
B. Your average trading profits/partnership trading profits for the three years 2016-17, 2017-18, and 2018-19 are between £0 - £50,000 and your average trading profits for those years are more than half of your total taxable average income for those same years, or
C. If you did not trade in 2016-17, your average trading profits/part- nership trading profits for the two years 2017-18, and 2018-19 are between £0 - £50,000 and your average trading profits for those years are more than half of your total taxable average income for those same years.
From July 2020: proposed modified extra condition for parents, including adoptive ones, who took time out of trading to care for their children within the first 12 months of the birth of the child or within 12 months of an adoption placement: • If your trading profits dipped in 2018-19 due to parenting, you will now be able to use either their 2017-18 or both their 2016-17 and 2017-18 self-assessment returns as the basis for their eligibility for the SEISS.
SCOTTISH TAXPAYERS: NEWLY SELF-EMPLOYED
• If you are not eligible for the SEISS because you are newly self- employed you may be eligible for Scotland's: Newly Self-Employed Hardship Fund.
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close or to be restricted in such a way that your trade closed or is otherwise adversely affected.
• You cannot organise your work or workplace to allow your staff to work safely.
• You cannot serve customers due to social distancing. • Restrictions have affected your customers or staff. • Your supply chain is interrupted due to shortages of product, PPE etc.
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