Following the widespread uptake of the Coronavirus Job Retention Scheme, the government announced that it would also launch a support scheme for the self-employed. Can you benefit?
Open. The government’s Self Employed Income Support Scheme (SEISS) opened for claims on Wednesday 15 May. The scheme allows you to make a claim if your business has been adversely affected by the coronavirus pandemic.
Grant. A successful claim will see you receive a grant that you do not need to repay. However, it does count as income for tax and NI purposes. The grant is based on a hypothetical three-month trading period, on your average taxable profits for the three tax years up to and including 2018/19. This average will be used to calculate a monthly figure, and the grant will be a single instalment of three times this amount multiplied by 80%. This is subject to a cap of £7,500.
Example. A client had a loss of £2,000 in 2016/17, a profit of £12,000 in 2017/18, and a profit of £30,000 in 2018/19. His average annual profit from those years is therefore £13,333. This is equivalent to £1,111 per month, so his grant would be £3,333 x 80% = £2,666.
You must have carried on the trade during 2019/20 and intend to continue trading in 2020/21 as well.
Trap. If your average trading profit for the three years exceeds £50,000, you won’t be eligible for the SEISS.
Guidance. There are further rules if you have only traded in some of the years in question, as well as how you need to consider non-trading income. For details of these rules, as well as the link to apply for the grant click here.
What to do next
For further information on this and other topics contact Tony on 07974-418819 or email at firstname.lastname@example.org or through the contact page of the website http://www.milestone-solutions.co.uk