What do I need to know about the Self Employed Income Support Scheme? AKA 'SEISS'

Flash-forward a few weeks, and we're now trying to figure out which, of the economic buffet of support of offer, should we choose!

For all the government's follies, when it has come to delivering financial support cushion for UK businesses, they've delivered and delivered uncharacteristically early.

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Amazingly, as of May 6th, weeks ahead of schedule, HMRC will begin contacting three and a half million Self-Employment Income Support Scheme (SEISS).

What will you get?

• You'll receive a taxable grant covering 80% of your average monthly earnings over the last three years of your income.
• Salary will be cover up to a maximum of £2,500 per month up to a max of £7,500 (equivalent to three months’ profits).
• If you have been self-employed for a shorter period, they will calculate it using the figures based on what HMRC hold.

Who will get it?

Who qualifies

• The scheme will cover 95% of the self-employed. This includes all self-employed people who's trading profits are no more than £50,000.
• you must have traded in the tax year 2018 to 2019 and submitted a self-assessment tax return before 23rd of April. (The deadline was Jan 31st but extended to April 23rd)
• at least half your income must come from your self-employment

TAXO'D TOP TIP: Trading Profits is your total income, minus your allowable expenses or any previous year losses. In employment terms this would be referred to your take-home pay' (or beer money).*

Who doesn't qualify

• High earners: Those with earning above £50,000
• If you're new to Self employment and not yet filed a tax return, this is due to having no real data in which to validate your potential earnings. But expect more developments on this.

TAX TIP: if you're feeling anxious there's no need to wait around for the call to confirm your eligibility, you can go online here and check your eligibility for SEISS.

Before you jump on in, make sure you have checked off the following prep points to ensure a smooth ride.

• have/know your Unique Taxpayer Reference (UTR) and your Insurance Number
• make sure your details are up-to-date in their Government Gateway account

Once the check is complete, you'll be given a date when you can submit your claim.

When will you get it?

• Claims service open on Wednesday 13 May
• You'll receive the full SEISS grant six working days after the claim is made, with some payments reaching bank accounts as early as 25 May.

How will you get it?

• HMRC will be in touch directly with those who are eligible for the grant
• or as I mentioned before, you can go online here and check your eligibility for SEISS in the meantime
• If all checks out, you'll receive payment directly into your bank account
• You will be issued the grant in one single lump-sum covering 3 months backdated to March 1st.

TAXO TOP TIP: This is a grant, not a loan, so what you get is what you keep. But keep in mind that this is a taxable income grant, which means you will pay tax on the amount in the same way that you pay tax on any income you make with a regular job.

Example: if you earnings are nearing the high-income threshold (£50,000) and you take the grant, this could take your earnings above £50,000 (the high-income threshold) taking your taxable income rate to 40% up from 20%.

Other options available

Unfortunately, not all will benefit from the SEISS scheme as some will fall into the dreaded 'grey area'. If you are ineligible, HMRC will help you to understand why and guide you otherwise. The good news is that there are quite a few financial support schemes now available and if you need financial support, then they are worth exploring. Check them out here

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Disclaimer: This is simply a guide and should not be treated as tax advice. Contact HMRC directly if you need tax advice.