Good news for the self-employed! Do you fall into this category? Then, you’ll be both pleased and relieved. The Government is extending its Self-Employment Income Support Scheme (SEISS) and will pay out another single grant covering June, July, and August. In making this announcement just the other day, the Chancellor, Rishi Sunak, confirmed that this would be the final such payment.
If you’re eligible, you’ll be able to claim this second grant in August. It will be set at 70% of your average monthly trading profits, with a maximum of £2,190 per month – £6,570 overall.
How will the second grant for the self-employed work?
The first and most important point to remember is that you still have time to claim the first grant. If you haven’t already done so, make a note. The deadline is Monday, July 13th. This covers the three-month period – March until May. If you’re eligible, you can claim a grant of up to 80% of profits, set at a maximum of £2,500 per month, or £7,500 in total.
Applications for the second grant will open in August. This will be worth 70% of your average monthly trading profits, again paid out in a single instalment and is aimed to cover you for May, June and July. This time HMRC will cap the grant at £2,190 per month, or £6,570 in total.
Am I eligible for these grants?
The eligibility criteria are the same for both grants. A key point is that, even if you don’t plan to claim for the first grant, you can still claim for the second.
Here’s your eligibility checklist –
- Your average trading profit must be no more than £50,000 per year. There’s no scaling here. A penny over this amount and you get nothing. The period of calculation is the three financial years – 2016-17, 2017-18 and 2018-19 (or the relevant years if you have not traded for all three of those years)
- More than 50% of your total income must come from self-employment.This is for either your 2018/19 tax return or, if not, the average of your 2016/17, 2017/18 and 2018/19 tax returns. Think about your other sources of income – from dividends, property, pensions, savings, and taxable benefits. For you to remain eligible, the total of these mustn’t be more than 50% of your total income.
- You must have filed a tax return for 2018/19. In other words, you need to have been self-employed before 6 April 2019. The deadline for filing a 2018/19 tax return was Thursday 23 April (extended from January 31st, 2020). If you had fewer than 12 months of self-employment in that 2018/19 year, this will be counted as your total profit for the year. You can’t work out a pro-rata amount.
In Chancellor, Rishi Sunak’s own words …
“Our top priority has always been to support people, protect jobs and businesses through this crisis. The furlough and self-employment schemes have been a lifeline for millions of people and businesses.
“We stood behind Britain’s businesses and workers as we came into this crisis and we stand behind them as we come through the other side.
“Now, as we begin to reopen our country and kick-start our economy, these schemes will adjust to ensure those who are able to work can do so, while remaining amongst the most generous in the world.”
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