Self-employment income support scheme is rolled out
Self-employment income support scheme is rolled out as millions of eligible taxpayers are contacted by HMRC
The Coronavirus Job Retention Scheme (CJRS) has been a literal lifesaver for hundreds of thousands of people across the country. The scheme, which has now been extended to the end of June, saw the government pay 80% of staff wages who had been placed on furlough, up to £2,500 a month. The country rejoiced with this news and the CJRS ship seemed to be sailing smoothly through uncharted waters. However, there was a group of people who stood on the shore watching the ship sail away crying out “what about us?!”. These were the self-employed.
Yes, if the CJRS was the Titanic then the self-employed were poor Jack clinging onto a bit of driftwood and the PAYE employees were Rose, safe and sound on her bit of wood when she could have totally shared it. The self-employed were among the last to be offered government support to combat the disastrous impact of Covid-19 and this seemed to be such a huge oversight as they make up such a huge part of the workforce and many a head was scratched wondering why only PAYE employees were being protected by the CJRS.
Luckily, the Chancellor and overall top bloke Rishi Sunak listened once again (although he needed his ears cleaned first) and as of May 3rd, HMRC began contacting around 3.5 million taxpayers who may be eligible for the new self-employment income support scheme (or SEISS) to explain the application process and help them ready themselves to make a claim,
The SEISS is a temporary scheme that allows those who are eligible to claim a taxable grant worth 80% of their average trading profits up to a maximum of £7,500 (equivalent to 3 months profits) in a single instalment. Additionally, HMRC will also be inviting customers, or their agents, to go online and check their eligibility for SEISS. Taxpayers are eligible if their business has been adversely affected by Covid-19, they traded in 2019/20, intend to continue trading and they meet 3 criteria:
- Earn at least half of their income through self-employment
- Have trading profits of no more than £50k per year, and
- Traded in the tax year 2018/19 and submitted their self-assessment tax return on or before April 23, 2020, for that year.
If you want to check your eligibility online head to the gov.uk website. Make sure you have your National Insurance number, your Unique Taxpayer Reference (UTR) and that all your details are up to date on your government gateway account.
The claims service is due to be operational by Wednesday, May 13th, with payments reaching bank accounts by May 25th, or 6 working days after the claim is made. If you are eligible (HMRC are using 2018/19 tax returns and further back where needed to determine eligibility) then you will be contacted by text, email or letter.
If you are not eligible then HMRC will direct you to guidance that will help you understand why and give advice about what other services might be available to you. Unfortunately, based on the somewhat strict criteria, many people may be disappointed to find out they are ineligible. To make matters worse, HMRC’s phone lines are expected to be incredibly busy over the coming weeks so if you feel like speaking to an actual person this may prove difficult. We can only hope that resources are put into place, even retrospectively, to make sure that no one gets left behind through no fault of their own.
Free Webinar: COVID-19 & Payroll
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Written by Aoibheann Byrne
BrightPay Payroll Software