If you’re self-employed, the last couple of months might have left you feeling uncertain and concerned for the future of your business.
Perhaps you’ve been able to continue trading safely through the lockdown period, but projects may have been put on hold or even cancelled. Clients may be struggling to pay you on time, if at all.
All of these things can add up to a whole lot of stress, and unfortunately, can lead to cash flow problems for your business, either now or further down the line.
Thankfully, some good news – the self-employment income support scheme (SEISS) portal went live on 13th May, with claims being processed and payments made.
To help you navigate your way through the process, we’ve put together this guide.
Are you eligible for SEISS?
Before we go any further, this guide assumes that you are eligible for the self-employed income support scheme.
If you’re still unsure which of the government’s support schemes applies to you, please check out our COVID-19 Business Support Hub for more details.
In summary, you can apply for the SEISS if:
- you have average profits of £50k or less.
- you make more than 50% of your total income from self-employment.
- you are already registered as self-employed and submitted a tax return for 2018-19 by 23rd April 2020.
- you are trading when you apply, or otherwise would be except for COVID-19, and will continue trading into 2020-21.
If you’ve checked with HMRC, and you are eligible, you’ll receive a date from which you can submit your claim.
How to submit your claim
First of all, you can access the claim system on GOV.UK by searching for “Self-Employment Income Support Scheme”.
You’ll need to have a Government Gateway ID – but if you’ve already created one previously, you can login with your existing account.
When you’re ready to make a claim, you’ll need to make sure you have the following information handy:
- Your 10 digit unique taxpayer reference number (UTR)
- Your national insurance number
- The bank account number and sort code for the account into which you’d like the grant to be paid.
- Your government gateway account login details.
Finally, you’ll also need to confirm that COVID-19 has impacted your business.
Once your claim has been submitted, you’ll be advised of the grant amount, and provided with a claim reference number. You should make a note of this information.
The money should be paid into your chosen bank account within 6 working days.
How is your SEISS grant calculated?
The grant will cover the period from March through to May (3 months), and the amount you’ll receive is calculated as follows:
- 80% of your average monthly profit over the last 3 years.
This is capped at £7,500 or £2,500 per month.
Trading profit 2016/17 of £17,000
Trading profit 2017/18 of £22,000
Trading profit 2018/19 of £35,000
Average trading profit = (£18,000 + £22,000 + £35,000) / 3 = £25,000
Average monthly profit = £25,000 / 12 = £2,083.33
Grant amount = (£2,083.33 x 80%) x 3 = £5,000.00
If you only traded during 2017/18 and 2018/19, the calculation would only use an average of those years.
What if your grant amount is incorrect?
You may feel your grant has been calculated incorrectly. If so, it’s possible to query the amount with HMRC immediately after the claim is submitted.
To do this, you’ll need your claim reference number, so make sure to keep a record of this. You’ll also need to provide a detailed account as to why you believe the calculation is wrong, including supporting figures.
The HMRC phone lines are understandably very busy at the moment, so it’s best to contact them using the online methods available – unless you don’t mind waiting on hold for a long time!
Freedom in Numbers - Jargon-free Business Support
For plain English, jargon-free information on the support available to your business, please take a look at our dedicated business support hub.
If you’re still struggling to plot a path through the financial and accounting predicaments your business is facing, please give us a call and we’ll be happy to help.