COVID-19: Assistance for the self-employed
This article was last updated on 29 May at 19:30.
Self-employed people have been hit hard financially by the COVID-19 pandemic. The Government has announced an unprecedented package of assistance for business, employees, and for the self-employed whose business has been adversely affected by the COVID-19 crisis.
Second SEISS Grant
On 29 May, the Chancellor announced plans to extend the Self-Employment Income Support Scheme (SEISS) for those people whose trade continues to be, or is newly, adversely affected by COVID-19. Eligible self-employed people will be able to claim a second and final SEISS grant in August; this will be a taxable grant worth 70% of their average monthly trading profits for three months, paid out in a single instalment and capped at £6,570 in total.
The eligibility criteria for the second grant will be the same as for the first grant. People do not need to have claimed the first grant to claim the second grant: for example, their business may have been adversely affected by COVID-19 more recently.
Claims for the first SEISS grant (see below), which opened on 13 May, must be made no later than 13 July. Eligible self-employed people must make a claim before that date to receive the first SEISS grant (a taxable grant of 80% of their average monthly trading profits, paid out in a single instalment covering three months' worth of profits, and capped at £7,500 in total). So far, we’ve seen over 2.3 million claims worth £6.8 billion.
More information about the second SEISS grant will be available on GOV.UK on 12 June.
First SEISS Grant
Taxable grants of 80% of taxable profits, averaged over the last three years, will be paid to the self-employed and partners with taxable profits of up to £50k per year. Only those who traded in 2018-19 and 2019-20 and intend to continue to trade in 2020-21, are already registered for Self Assessment and have submitted a 2018-19 tax return will qualify. HMRC is now contacting eligible taxpayers. The online claim service will be available from 13 May, and it is intended that successful claimants will receive payments within six working days.
Claims must be made by the taxpayer through their Government Gateway account. It will not be possible for agents/accountants to make the claims, so if you don’t already have a Government Gateway account, set one up now.
An online eligibility tool is now available, which can be used by taxpayers and their agents by inputting the taxpayer’s UTR and National Insurance Number.
The self-employed can continue to work, where they can, and still benefit from the scheme.
Other assistance for the self-employed previously announced includes:
- Self Assessment Income Tax payments on account due 31 July 2020 are deferred until 31 January 2021 – this should ease cashflow
- Self Assessment Income Tax payments on account (POA): it may be possible to request a refund of some of all of the POA for your 2019-20 tax liability (paid on 31 January 2020), if your income has reduced significantly in the current year
- VAT payments due before the end of June 2020 are deferred
- Time to Pay arrangements are available for all taxes, including PAYE and VAT
- Business Rates relief and cash grants
- The Job Retention Scheme, if you employ others
- Business Interruption Loan Scheme
- The self-employed don’t qualify for Statutory Sick Pay (SSP) but instead may qualify for Universal Credit or the Employment Support Allowance