IRRV Alert - week ending 10th July 2020

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Coronavirus: Self-Employment Income Support Scheme (9 July 2020)

 

 

 

 

 

Coronavirus: Self-Employment Income Support Scheme

 Published Thursday, July 09, 2020 

To support the self-employed through the coronavirus outbreak the Government has introduced the Self-employment Income Support Scheme (SEISS).

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To support the self-employed through the coronavirus outbreak the Government has introduced the Self-Employment Income Support Scheme (SEISS). The Scheme  pays taxable grants worth 80% of someone’s average monthly trading profit, up to £2,500 per month over a three-month period starting from March 2020.

The Office for National Statistics (ONS) estimates that just over 5 million people (15% of the UK workforce) are self-employed. The Government says the SEISS will cover 95% of people who get the majority of their earnings from self-employment. The Institute for Fiscal Studies (IFS) estimates that just 62% of all self-employed individuals will be covered.

On 30 April, the Government published the Treasury Direction to HMRC, the formal legislative guidelines for the SEISS, and the Scheme was opened for applications on 13 May.

HMRC have updated their detailed guidance on the SEISS. This says:

  • The scheme currently allows you to claim a taxable grant worth 80% of your average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total. If you’re eligible and want to claim the first grant you must make your claim on or before 13 July 2020.
  • This scheme is being extended. If you’re eligible for the second and final grant, and your business has been adversely affected on or after 14 July 2020 you’ll be able to make a claim in August 2020. You can claim for the second grant even if you did not make a claim for the first grant …
  • If you receive the grant you can continue to work, start a new trade or take on other employment including voluntary work, or duties as an armed forces reservist.
  • The grant does not need to be repaid but will be subject to Income Tax and self-employed National Insurance.
  • HMRC will work out if you’re eligible and how much grant you may get. But you can follow these steps to help you understand how we will do this and what you can do now.
  1. Find out who can claim.
  2. Check if you’re eligibleand get the date you can claim from.
  3. Find out how HMRC works out your grant.
  4. Make your claim.
  5. Find out when you’ll get the money paid into your bank and how to record the grant.[1]

On 29 May, the Government announced the Scheme would be extended, with those eligible able to claim a second and final grant capped at £6,570.[2]

As with other aspects of the Covid-19 pandemic and the Government’s response to it, this is a fast-moving area and the paper should be read as correct at the time of publication. Similarly, as with other Commons Briefing papers, this information is provided to Members of Parliament in support of their parliamentary duties and is not intended to address the specific circumstances of any particular individual. A suitably qualified professional should be consulted if specific advice or information is required.

Notes :

[1]     HMRC, Check if you can claim a grant through the Self-Employment Income Support Scheme, 2 July 2020

[2]     HM Treasury published a second Treasury Direction on 2 July to extend the Scheme.

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