During the Pandemic, access to and information on help for the self employed, and partnerships has been delayed and often unclear, with those affected waiting to hear when the scheme would be available and unable to contact HMRC for any information. In essence, we’ve all been reliable on daily Government updates as individuals have effectively searched in the dark.
What Can You Claim?
The Self-Employed Income Support Scheme (SEISS) allows the self-employed to claim 80% of their average profits for the period up to 2018/19, limited to £2,500 a month, for a three-month period initially.
Like CJRS there are lots of conditions that need to be satisfied such as being self-employed in 2018/19 and continuing to trade in 2019/20 and 2020/21, or would be doing so if it the business had not been impacted by Coronavirus.
The Calculation
We are still awaiting details of the claims process but HMRC have updated their guidance on the calculation of “self-employed profits” and “total income”.
To make a successful claim the self-employed profits in 2018/19 must not exceed £50,000 and must be more than 50% of the individual’s total income. If that test is not met, then the same £50,000 and 50% tests are applied to average profits and total income over the three years (or shorter period) to 5 April 2019.
Self-Employed Profits
HMRC guidance has defined self-employed profits for the purposes of SEISS as turnover for the business less allowable business expenses and capital expenditure. This figure may not be the same figure as that originally declared in your self- assessment tax returns.
If the calculation results in a trading loss, the amount that is averaged is not nil for that year but the negative result.
Total income
HMRC state that total income for the purposes of the 50% test would be taxable income from all sources for the relevant year such as;
- property income
- bank interest
- employment income
- social security income
Unlike the furlough scheme mentioned earlier the self-employed can continue trading, albeit at a reduced level.
It is believed that HMRC are on target to open the SEISS in early May, they should write to those eligible for the scheme and payment should be received early June 2020. [1]
MJB Avanti are happy to help you determine whether you are eligible and assist you with your claim if required, call (08000) 388 799
Reproduced from 2020 Innovation