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The self-employment income support scheme (SEISS) provides financial help to self-employed traders and partners in partnerships who have lost income as a result of the COVID-19 pandemic. Not all self-employed traders can benefit – it is only open to those with profits from self-employment of £50,000 or less who have filed a 2018/19 tax return. The scheme will provide eligible traders with a grant equal to 80% of average profits for three months, capped at £2,500 a month. The grants should be paid in early June 2020.

Who is eligible?

To qualify, the individual must:

• have submitted their self-assessment tax return for 2018/19 by 23 April 2020;

• traded in 2019/20;

• be continuing to trade when they claim the grant, or would be except for the Coronavirus pandemic;

• intend to continue to trade in 2020/21; and

• they have lost profits due to the Coronavirus.

Traders who had not submitted their 2018/19 tax return by 23 April 2020 are not able to claim a grant under the SEIS.

£50,000 profit limit

The grant is limited to traders whose trading profits are not more than £50,000 either for 2018/19 or on average for the three years 2016/17 to 2018/19 inclusive. This if a trader has profits in excess of £50,000 for 2018/19 they can still qualify if their average profits over 2016/17, 2017/18 and 2018/19 are less than £50,000. Profits from self-employment must comprise at least 50% of the individual’s income.

Amount of the grant

The grant is based on average trading profits over the following three tax years:

• 2016/17;

• 2017/18; and

• 2018/19.

The grant is worth 80% of the average trading profits (capped at £2,500 per month) for three months. Where self-assessment returns have not been submitted for 2016/17, 2017/18 and 2018/19, the grant will be calculated by reference to average profits for continuous periods of self-employment, either 2017/18 and 2018/19 or only 2018/19 where the trader was not trading in 2017/18, even if they traded in 2016/17. This will apply, for example, to those who only started trading in 2017/18 or 2018/19.

Making a claim

It is not yet possible to claim. HMRC are to write to those who (based on 2018/19 filed returns) they think are eligible for a grant in mid-May. Claims must be made via the online portal once this is open and grants should be paid in early June.

Help for those outside the scheme

The SEISS will not help all self-employed traders who lose income as a result of the pandemic. Those whose profits exceed £50,000 either in 2018/19 or an average over the three-year period from 2016/17 fall outside its scope, as do those who did not submit a 2018/19 tax return by 23 April 20202 or who did not start to trade until 2019/20. Individuals outside the scheme can, if eligible, make a claim for universal credit if they need financial help during the pandemic.

Deferring VAT and self-assessment

The self-employed can also take the opportunity to defer the self-assessment second payment on account for 2019/20, due by 31 July. Where this option is taken, the payment must be made by 31 January 2020. VAT registered businesses can also take advantage of the VAT deferral option.

The Coronavirus Job Retention Scheme (CJRS) enables employers who are unable to maintain their workforce due to the COVID-19 pandemic to furlough their staff and claim a grant of 80% of the employee’s wages to a maximum of £2,500 a month. Employers are also able to claim the associated employer’s National Insurance contributions on the amount claimed, and also the minimum pension contributions that they are required to make under auto-enrolment. The full amount of the grant must be paid over to the furloughed employee, and the employee pays PAYE tax and National Insurance in the usual way. Employers can choose to top up the amount paid to employees to maintain their usual salary but are under no obligation to do so. The money received by the employer is taxable income and is taken into account computing their taxable profits.

Eligible employers

Claims can be made by employers who have furloughed staff as a result of the COVID-19 pandemic, as long as they: • created and started a PAYE payroll scheme on or before 19 March 2020; • are enrolled for PAYE online; and • have a UK bank account.

Eligible employees

Claims can only be made in respect of furloughed employees. The scheme does not apply to staff who have had their hours and pay reduced. Furloughed employees cannot do any work for the employer while furloughed, although they may be able to work for a different unconnected employer if their contract permits this or work in a self-employed capacity. Only furloughed employees who were on the payroll on or before 19 March 2020 and in respect of whom a PAYE submission had been made by this date are within the scope of the scheme. Employees who were on the payroll as at 28 February 2020 and who were made redundant after that date and before 19 March 2020 can be included in the scheme if the employer re-employs them and furloughs them. The employee does not need to be re-employed by 19 March to be eligible for furlough. The option to furlough an employee is available regardless of what type of contract an employee is on. Thus the scheme can be used to furlough employees on full or part-time contacts and also those on flexible or zero-hours contracts.

Amount of the claim

Employers can claim 80% of a furloughed employee’s wages to a maximum of £2,500 a month. The calculation of the amount which can be claimed will depend on how the employee is paid and whether their pay varies. The claim will be based on the employee’s ‘wages’, which are the regular payments which the employer makes to the employee. It will include non-discretionary overtime, fees and commission, but no discretionary payments. Payments in kind are also excluded. The employer can also claim the associated employer’s National Insurance and minimum pension contributions on the amount of the grant. HMRC have produced a calculator which can be used to work out the amount which can be claimed in respect of a furloughed employee. Claims should be made online via the online portal. Employers should receive the money within six working days.

As part of a number of measures to support the country during the coronavirus (COVID-19) pandemic, Working Tax Credits payments will be increased by £1,045 to £3,040 per year from 6 April 2020 until 5 April 2021.

The amount a claimant or household will benefit from will depend on their circumstances, including their level of household income. But the increase could mean up to an extra £20 each week.

If you claim Working Tax Credits, you don’t have to take any action or contact HMRC – the increase in your payments will start from 6 April 2020.