Self-Employed Income Support Scheme ‘SEISS’

The Self-Employed Income Support Scheme ‘SEISS’ was finally signed off last week, Thursday 30th April 2020, by the Chancellor of the Exchequer, Rishi Sunak.

What is it?

We have touched on it before, please click here, but the grant is for the self-employed, that means if you run your business through a limited company this is not for you.

The grant is for those self-employed who have been adversely affected by the coronavirus pandemic.

Only the self-employed can make the claim, this is a claim that we as your accountants are not able to make on your behalf.

The rules that must be met are quite lengthy but in essence…

Qualifying Person

You must be an individual and your business must be adversely affected by the coronavirus, you must have been carrying on a trade for the tax years 2018-2019 and 2019-2020 and intend to still carry on in the 2020-2021 tax year.

The Profit Conditions

Your profits must be under £50,000 but over £NIL for the 2018-2019 tax year and those profits are equal to or more than half your relevant income for that tax year.

When averaged, your averaged profits must meet the above £50,000 criteria for the tax years 2016-2017, 2017-2018 and 2018-2019.

If you did not trade in the tax year 2016-2017 but did in the following tax years those years will be used and again the £50,000 conditions apply.

Maximum Claim

The cap on claims is £2,500 per month.

Each claim will be 80% of your average monthly trading profits based on the above profit conditions.

The grant is taxable and subject to self-employed national insurance.

To Claim

Your claim will be based on past years tax returns, this is not a scheme whereby you can say you expected to trade higher, HMRC already has the data it needs to base its calculations on.

You will need a government gateway account, the service will be available from 13 May 2020, if you are eligible your claim will be approved within 6 working days, as we have seen from the furlough claims system for employees the payments are made promptly.

To create a government gateway account please click here and follow the instructions.

How Can I Check if I am Eligible?

HMRC has provided an online tool to find out if you are eligible to make a claim, we would suggest you start there. The tool can be accessed here.

For more on the scheme please visit the government website here. 

As Covid-19 continues to dominate the news and everyone’s thoughts, the government has announced further measures in the last week or so to shore up the economy…

Bounce Back Loans ‘BBLS’

Another announcement late last week concerned loans. We have all seen the Coronavirus Business Interruption Loan Scheme ‘CBILS’ are proving difficult for many small businesses to access, so recognising this the government has come up with another loan, this time with quick and easy setup.

Bounce Back Loans are from £2,000 to £50,000 and are 100% government backed with an affordable flat rate of interest set at 2.5%, that is the lowest rate we have ever seen, it is comparable to many residential mortgage rates.

The first 12 months are interest free and with up to 6 years repayment terms.

For further information on the bounce back loans you can visit the government website here.

Remember, before you take out any debt currently, discuss your options with your accountant.

The Future Fund

Another loan announced a few weeks ago, and possibly missed by many due to the number of announcements we are still getting from the government, was the Future Fund, the scheme will launch in May 2020.

This scheme is aimed at high growth start-ups, yet the criteria is that they have raised at least £250,000 over the past five years from third-party investors, so not a true start-up after all, that said, it will provide government loans from £125,000 to £5 million, a condition is that at least equal match funding is provided from private investors.

The loans are at an 8% interest rate and for only 3 years, another downside at the time of writing they do not appear to be compatible with either the Seed Enterprise Investment Scheme ‘SEIS’ or the Enterprise Investment Scheme ‘EIS’, maybe this will change?

For more on the Future Fund please click here.

Top-up to Local Business Grant Funds Scheme

Announced over the weekend, another £617 million is to be made available to help small businesses with ongoing fixed property related costs. This is in addition to the £12.33 billion fund already announced which resulted in grants of £10,000 and £25,000 being paid out.

Priority is being given to those in shared spaces, regular market traders small charity projects and bed and breakfasts that pay council tax rather than business rates, all these were previously overlooked when the Small Business Grant Fund and Retail, Hospitality and Leisure Grants Fund were made available.

For more details please click here.

And Finally…

A recap, there is a lot to take in with the constant stream of news about the latest government support, we have throughout our blog tagged COVID-19 related articles so they are easy for you to find, but here is a quick rundown for you:

  • Furlough covering the period 1 March 2020 to 30 June 2020 where 80% of your staff salaries are paid, a cap of £2,500 per employee per month applies,
  • Differed VAT for the period 20 March 2020 to 30 June 2020 but this will need paying by 31 March 2021. You still need to submit your VAT Returns as normal and as long as you cancel your DD HMRC will not mark you in default as they know it’s covid-19 related,
  • Deferred Self- Assessment Payment on Account for 31 July 2020 can be deferred until 31 January 2021,
  • Time to Pay service for other taxes like Corporation Tax and PAYE,
  • SSP rebate, if COVID-19 related employers will be able to claim a rebate,
  • Small Business Grant Fund ‘SBGF’ and Retail, Hospitality and Leisure Grant Fund ‘RHLGF’ either £10,000 or £25,000 in grant funding,
  • Business Rates Relief for the 2020-2021 tax year, if you are eligible your council will contact you if you operate a shop, restaurant, café, bar or pub, cinema or live music venue, sports club, gym or spa, hotel, guest house or self-catering accommodation; and
  • Various loans some of which we have covered in this article.

Whether we are your accountant, or you use another firm, please remember, we are also one of your suppliers, an important one. As demonstrated in this blog, we are spending a lot of our time and resources dealing with the changes the government are bringing in to help you and your business. We are deciphering and reporting them to you, and we are going to be your first port of call for help accessing or implementing government help, but we can only be here if we are paid. Please remember to pay your accountant, after all, without payment your accountant will cease to exist, and then where will you be?