HMRC have worked very hard and are looking to deliver the Self-employed Income Support Scheme (SEISS) grants this month to those that are eligible, this is a month earlier than the Chancellor stated in his initial announcement of the scheme – this is fantastic news.
You can check eligibility by following this link. You will need your UTR and NI number to hand and the on-screen instructions will guide you through the checking process and then instruct you on setting up a gateway account. The portal is opening for claims from 13 May 2020 and if your claim is approved you will receive payment within 6 working days.
HMRC will be confirming that your business has been adversely affected by COVID-19 and we are told they will be using a risk based approach to check a person’s compliance and that HMRC will take action in cases of suspected fraud.
If you are a client of Clearways Accountants we can give you an approximation of your claim,
Here are some questions and answers on the scope of the regime (my thanks to the CIOT webinar series for this information)
|Query||Status / response|
|Who is eligible and who isn’t|
|What is the position for property lettings businesses, including furnished holiday lettings? Do they qualify for the SEISS?||No, the SEISS scheme only applies to individuals who complete the self-employment or partnership trading pages of the self-assessment tax return. These pages exclude income from property, which includes furnished holiday lettings.|
|Does one look at the trading profits and total income at partner level or at partnership level when working out whether a partner in a partnership is eligible to claim a SEISS grant?||HMRC’s guidance says that a member of a partnership can make a claim for the SEISS grant and that eligibility is based on the partner’s share of the partnership’s trading profits.|
|Are all trading partnerships included even those with a corporate partner?||Yes, but only to the extent that they have partners who are individuals. The partners that are incorporated are not covered by the SEISS.|
|Can you claim the SEISS grant and continue to work?||Yes, you can receive the grant and continue to work in your self-employed business, start a new trade and also take on other employment including voluntary work or duties as an armed forces reservist.|
|If an individual has remained self-employed throughout the 2016/17, 2017/18 and 2018/19 tax years but has changed what they do, for example, running a café, then closing it down and becoming a window cleaner, does this matter?||No, so long as you were self-employed in 2018/19 and the other eligibility criteria are met.|
|Are the self-employed who started trading during 2019/20 eligible for the SEISS?||No, if you were not self-employed in the 2018/19 tax year and so did not submit a 2018/19 tax return showing any self-employed income then you are not eligible for the SEISS.|
|I didn’t submit my 2018/19 tax return by 23 April 2020. Can I still claim?||No, if you didn’t submit your 2018/19 tax return on or before 23 April 2020 you will not be able to claim.|
|Trading profits and losses|
|How does it work when a taxpayer has made a loss in one of the tax years on which the grant will be based?||In-year losses are taken into account as well as profits in calculating a person’s eligibility for the grant and the amount of the grant they will receive.|
|What if an individual is self-employed with more than one trade at the same time? Do you combine them?||Yes, if a person has more than one trade in the same tax year, HMRC will add together all the profits and losses for all the trades to work out the trading profit.|
|If I started being self-employed during the 2018/19 tax year, will my trading income and profits be extrapolated to be expressed as an annual rate when looking at whether I am eligible to receive the grant?||No, if you started being self-employed during 2018/19, for example on 6 October 2018, HMRC will look at your actual trading income and profits for the 6 months of trading. They will not be extrapolated to be expressed as an annual amount.|
|Is the grant taxable?||Yes, the grant received will be subject to Income Tax and Class 4 National Insurance Contributions.|
|How long will the scheme last for?||It is a temporary scheme starting on 1 March 2020 and lasting initially for three months, but it may be extended.|
|How is the requirement to show that a business has been adversely affected as a result of the COVID-19 crisis to be determined?||To be eligible to claim the grant, you will need to confirm to HMRC that your business has been adversely affected by coronavirus.
HMRC will use a ‘risk based approach’ to check a person’s compliance with the scheme rules and will take action in cases of suspected fraud.
|Was it possible to amend a 2018/19 tax return before 23 April 2020, for example if one had been using the cash basis, the trading allowance or had claimed capital allowances, and had reported lower profits as a result?||No, if a person amends their 2018/19 tax return after 6pm on 26 March 2020 (the date the Chancellor announced the scheme), any changes will not be taken into account when working out their eligibility for the SEISS or the amount of the grant.|
|I submitted my 2018/19 tax return to HMRC between 26 March and 23 April. I’m sure I’m eligible, but HMRC’s eligibility checker is saying I’m not. What should I do?||HMRC are updating their systems for those people who have very recently filed their 2018/19 tax returns, and this is why the system won’t necessarily show a positive answer yet. Don’t ask for a review at this stage. Instead you should keep checking back as HMRC are working at pace to update their systems.|
|I submitted my 2018/19 tax return between 26 March and 23 April. Will I still get a £100 penalty for failing to submit my return by 31 January 2020?||Yes, late filing penalties will apply as normal for all 2018/19 returns filed after the 31 January 2020 deadline (but special provisions apply for those people affected by the loan charge – see below).|
|The claims process|
|Will HMRC work out how much I’m entitled to?||Yes, HMRC will work out the amounts due to you based on information that was submitted in your tax returns.|
|How will HMRC identify taxpayers whom they consider will be eligible?||HMRC will use data submitted on 2018/19 and earlier tax returns already submitted to identify eligible individuals.|
|What if I am told I am not eligible to make a claim, but I disagree?||You, or your agent, can ask for a review of HMRC’s decision. HMRC will undertake these reviews after 18 May, with a view to providing a response by the end of May.|
|Will I need a Government Gateway account to apply?||Yes, you will need to have set up a Government Gateway account and have your user ID and password to be able to apply. This will be explained in HMRC’s message.|
|When will payments be made?||HMRC will aim to make payments by 25 May 2020, directly into applicants’ bank accounts (this can be either a personal or a business bank account), or within six working days of completing a claim.|
|Will taxpayers have to deal with applying for the SEISS themselves or can they ask their authorised agents to apply for them?||Taxpayers must make the claim themselves. Tax agents or advisers cannot make the claim on their clients’ behalf. You should contact your adviser, if you have one, if you need help or support in making your claim.|