To help people that are eligible for the Self-Employed Income Support Scheme (SEISS) the Government has updated its guidance to confirm essential points.

Tax 

The grant will be subject to Income Tax and National Insurance contributions but does not need to be repaid.

Universal Credit

Many people awaiting payment from the SEISS grant may have made applications for Universal Credit.

The Government has confirmed that you should record the grant as part of your self-employment income and that it may affect the amount of Universal Credit you get. However, it will not affect Universal Credit claims for earlier periods.

Eligibility

Alongside the existing conditions outlines in its previous guidance, HMRC has said that self-employed people will have to confirm that their trading has been adversely affected by Coronavirus. To assess this the tax authority will use a ‘risk-based approach’ to compliance.

Self-Assessment extension

If you have not submitted your Self-Assessment tax return for the tax year 2018 to 2019, you must do this by 23 April 2020 or you will not be able to claim. HMRC has confirmed that it will review any late returns in the usual way.

This is important as HMRC will use data from 2018-2019 tax returns to identify those eligible.

Loan charge

If you are self-employed and have received payment in the form of a loan or any other form of credit covered by the loan charge, you may be able to apply for the grant.

However, your eligibility and average trading profits will be based on either:

• the average of the tax years 2016 to 2017 and 2017 to 2018
• the tax year 2017 to 2018 if you were not self-employed in the tax year 2016 to 2017

You also do not have to file your 2018 to 2019 Self-Assessment tax return by 23 April 2020. You should file by the 30 September 2020.

Claims process 

Self-employed individuals are unable to claim until HMRC has contacted them to confirm eligibility. The tax authority has said that it aims to contact those that are eligible by mid-May and will invite people to claim using the GOV.UK online service, which is currently being developed.

If you’re unable to claim online an alternative way to claim will be made available to you, details of which HMRC hopes to announce soon.

You should not contact HMRC, as it has said this will only delay the urgent work being undertaken to introduce the scheme.

Once a claim is processed

Once HMRC has received a claim and the grant is approved, it will contact you to tell you how much you’ll get and the payment details. HMRC has re-iterated that it will make payments by early June 2020.