May 29th, 2020 / Insight posted in Articles, Tax

Chancellor extends Self-Employed Income Support Scheme

Unexpectedly the Chancellor has extended the Self-Employed Income Support Scheme (SEISS) for a further three months to 31 August 2020.

Under the original SEISS covering the period from 1 March to 31 May, self-employed individuals were able to claim a grant worth 80% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £7,500 in total.

Applications for the second grant will open in August but with the grant reduced to 70% of average monthly trading profits. As before, this will be paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total. The reduction from 80%/£7,500 is intended to have some symmetry with the phasing out of the furlough scheme for employees.

The eligibility criteria are the same for both grants and it appears that the same restrictions will apply. This means that those with trading profits exceeding the £50,000 threshold and those who commenced their self-employment after 5 April 2019 will still miss out.

The extension of the SEISS still does not cover individuals who run their self-employed business through a limited company and pay themselves with dividends despite extensive lobbying on this point.

More details are expected to be released on this scheme on 12 June.