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Tax updates

Tax updates

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Second round of Self Employment Income Support Scheme Grant for the self-employed and partners of Partnerships during the Corona Virus outbreak (Covid-19

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Government have announced a second round of grant for the self-employed and partners of partnerships under the Self Employment Income Support Scheme (“SEISS”) as of 17 August 2020. We have summarised the main announcement below:

The scheme is relevant to the self-employed and members of a partnership who has suffered a loss of income due to coronavirus since 14 July 2020.

The first round of the SEISS which allowed affected individuals to claim a first taxable grant of 80% of their trading profits up to a maximum of £2,500 per month for three months closed on 13 July 2020.

The second and final round of the SEISS allows affected individuals to claim a taxable grant worth 70% of their average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £6,570 in total.

A claim under the second round of the SEISS must be made on or before 19 October 2020.

Who can apply

You can apply if you’re a self-employed individual or a member of a partnership and your business has been adversely affected by Coronavirus on or after 14 July 2020, and:

  • Have submitted your Income Tax Self Assessment tax return for the tax year 2018-19 on or before 23 April 2020;

  • Traded in the tax year 2019-20; and

  • Intend to continue to trade in the tax year 2020-21.

Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment. This is determined by at least one of the following conditions being true:

  • Having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income.

  • Having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period.

Further consideration

If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.

HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way.

How much you’ll get

You’ll get a taxable grant which will be 70% of the average profits from the tax years (where applicable):

  • 2016 to 2017

  • 2017 to 2018

  • 2018 to 2019

How to apply

The online service for the second and final grant is now available.

How we can help

We could help by:

  • Checking your eligibility;

  • Calculate the amount of the grant that you might be eligible for;

  • Establish the date from which you could make a claim; and

  • Prepare and file a claim on your behalf so that the grant is paid directly into your bank account.

Finally, should you wish to talk through the above, please do not hesitate to contact us on 0208 191 9867 or enquiries@alexandrwalker.com

Mohamad Auhammud