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14/05/2020

Self-employed service opens to 110,000 claims in four hours

14/05/2020

Self-employed service opens to 110,000 claims in four hours

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The government’s support scheme for the self-employed opened at 8am on Wednesday, attracting 110,000 applications in its first four hours.

The Self-Employed Income Support Scheme (SEISS) allows those who are self-employed and sole traders (including business partners) to apply for a grant worth 80% of their average monthly trading profits.

With businesses across the country closed due to lockdown, millions of freelancers are finding themselves without work. The scheme, which is being administered by HMRC, is expected to help around 3.5 million people in total.

As with the Coronavirus Job Retention Scheme, SEISS support is capped at £2,500 per month. The first pay-outs are expected to be with applicants by 25 May and will arrive in a three-month lump sum of no more than £7,500 to cover the months of March to May 2020.

Yesterday Chancellor Rishi Sunak confirmed that the scheme has opened several weeks ahead of schedule, saying: “We’re working ahead of time to deliver support to the self-employed and from today, applications open for the millions of people eligible for the scheme.

With payments arriving before the end of this month, self-employed across the UK will have money in their pockets to help them through these challenging times.”

Derek Cribb, Chief Executive of lobby group the Associated of Independent Professionals and the Self-Employed said, “For the self-employed, coronavirus is not only a health crisis, but also a pressing income crisis. That is why it is welcome that the government heeded our advice and created the admirable and vital SEISS. It is also excellent that the government has been able to open this early to many self-employed people in need.”

How does the Self-Employed Income Support Scheme work?

If you’re eligible to receive support via the SEISS scheme, you should have received a letter, an email or a text from HMRC inviting you to apply for it. Those who are eligible will have been assigned a date between 13 and 18 May when they can make their claim for the support. It’s important to note that you won’t be able to apply before your assigned date.

If you think you’re eligible for the support but you haven’t yet heard from HMRC, you can confirm your eligibility online using their eligibility checker tool. This will also tell you the date and time you can make your application for the scheme.

Unlike the government’s furlough scheme, you don’t have to stop working and earning if you’re in receipt of the scheme. You can also apply for Universal Credit.

You should have heard by 15 May if you’re eligible. If you haven’t received a letter by then, you can get in touch with HMRC directly using their coronavirus helpline on 0800 024 1222. The line is open Monday to Friday, 8am to 4pm, but bear in mind it’s an extremely busy time.

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How much money could I get from the scheme?

The amount you’ll receive is based on your average monthly profit, calculated over the past three tax years (2016/17, 2017/18 and 2018/19). If you’re not sure how much that is, you can check your previous tax returns – usually you’ll find this information in section 28. Any support payment is subject to income tax, as well as National Insurance contributions.

Unfortunately, if your business made a loss, you won’t receive any money at all. If that’s the case, and you’re struggling for money, it could be worth applying for Universal Credit.

What are the eligibility criteria?

To be eligible for financial help via the Self-Employed Income Support Scheme, you’ll need to meet all of the following criteria:

  • You must have been self-employed and trading throughout the 2019/20 tax year.
  • You must intend to continue trading in the 2020/21 tax year.
  • You will have submitted your tax return for the 2018/19 tax year, including details of your self-employed profits.
  • Your profits have been affected by the coronavirus, for example because you’ve been self-isolating, or if your business hasn’t been able to operate due to the conditions presented by the outbreak. There’s nothing specific you’ll have to provide to prove you’ve been affected, but it is something you’ll have to provide confirmation of as part of the application.
  • You should earn at least half of your income through self-employment, and your self-employment profits can be no more than £50,000.
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What do I need to make a claim for Self-Employed Income Support?

You should make sure before you log into the portal to apply for your support that you have the following information to hand:

  • Your National Insurance number
  • Your Government Gateway ID and password
  • Your self-assessment UTR number
  • The details of the bank account you’d like your grant paid into
  • Confirmation that your business has been adversely affected by coronavirus

I’m not eligible for support, what should I do?

There may be other financial support available that you can apply for. You may also be able to:

  • Defer your Income Tax and VAT payments
  • Apply for the government’s Business Interruption Loan Scheme, or a Bounce Back Loan
  • Get a grant for businesses that pay little or no business rates.

You can find out more about the support that’s available on the UK government website.

And if you strongly believe that you do meet the eligibility criteria, you can request that the decision is reviewed.

The coronavirus pandemic has affected millions of households and businesses across the UK. If your income has taken a hit and you’re concerned about debt, we’re here to listen, understand and help with free money advice. Contact the Creditfix team on 0808 253 3282.

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