A second scheme to give money to some self-employed people affected by Covid-19 opens on 17 August. It has almost identical qualification rules to the first Self-Employment Income Support Scheme (SEISS),but some new parents excluded from the first scheme can now claim. People can claim the second grant whether or not they got one from the first scheme, which is now closed.
You must have been registered as self-employed with HMRC for the 2018/19 tax year and filed your selfassessment by 23 April 2020. This rule excludes anyone who started their self-employment from 6 April 2019; you must also be continuing your self-employment in 2020/21. Your self-employment profits must be at least half your taxable income. That includes pensions, earnings, dividends, interest, rent, annuities – just about anything taxable. Also, your self-employment profits must not be more than £50,000 a year.
The 50 per cent rule and the £50k rule are first worked out on 2018/19. If you pass both, you qualify. If you fail, HMRC will see if you qualify by using the average of 2018/19, 2017/18 – and 2016/17 if you were self-employed then. Even £1 outside either limit disqualifies you. You must declare when you claim that your business was “adversely affected” by coronavirus on or after 14 July. The scheme does not cover company directors who pay themselves in dividends, even if they are sole directors.
There are probably as many self-employed people excluded from the scheme as the 2.6 million who claimed the first payment. The second payment is a lump sum equal to 70% of three months’ average trading profits, which are worked out over the three years 2018/19, 2017/18, and 2016/17. If you began or restarted self-employment in 2018/19, it will count just that year. The maximum payment is £6,570.
If you took a break because of a new baby or an adoption and that affected your profits in 2018/19 so you did not qualify for the first SEISS, the new rules allow 2018/19 to be ignored. You can also claim for the first SEISS payment.
For more information, search “SEISS” at litrg.org.uk or gov.uk.
Paul Lewis presents The Money Box R4