THE Chancellor of the Exchequer announced on March 26 the Self Employed Income Support Scheme (SEISS) to help self employed individuals through the Covid-19 pandemic. The statement came over a week after the announcement of the Job Retention Scheme to help employees, and the Chancellor admitted that it had been difficult to create a scheme that was in his words both deliverable and fair.

Key details are as follows:

n Support will be 80 per cent of monthly profits, capped at £2500 per month;

n Individuals need to have been self employed before April 5, 2019, to be eligible;

n For those self employed on April 6, 2016, the award will be based on an average of the three years profits to April 5, 2019. For those who have started self employment since April 2017 the award will be based on the average profit in this period. If this figure is greater than £50,000 then no claim is possible;

n The figure used in the calculations is the taxable profit as submitted on your tax return. It ignores losses brought forward and your personal allowance. The profit is also before any adjustments are made for farmers’ averaging;

n A person needs to receive the majority of their income from self employed sources. This covers both sole trader businesses and partnerships;

n With the scheme not due to open until mid May, the first payment is unlikely to be received before June 2020;

n Tax returns for the year to April 5, 2019, which should have been filed by January 31, 2020, need to have been filed by April 23 in order to be eligible.

n Businesses operating via a limited company are not eligible under this scheme.

n It is not necessary for the business to have ceased trading but it is necessary for a business to have lost profits as a result of Covid-19;

n HMRC has said they will contact those they think are eligible and invite them to make a claim.

The scheme fails to help those who became self employed since April 5, 2019, as HMRC does not hold details of profits for this group as their first tax returns are up to April 5, 2020. This contrasts with employees where employers make Real Time Information submissions of PAYE data each month and HMRC holds up-to-date information. Those running Furnished Holiday Cottages will also likely miss out, as under a quirk of the tax legislation, the income is taxed as property income rather than trading profits.

For any further information or clarification on HMRC business schemes or taxes, please call Keith Johnston, Tax Director, on 07793 621981 or email