Self Employed INcome support scheme (SEISS)

If you are self-employed you can apply for the SELF EMPLOYED INCOME SUPPORT SCHEME (SEISS) just go the link below and enter your unique taxpayer reference and national insurance number:

https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference

If eligible for SEISS you’ll be given a time/date when you’ll be able to apply for it. Follow the link that it gives you to apply. I didn’t write down the process but it is fairly simple and all of the calculations are done by /hmrc based on info in your tax returns.

If you are eligible and you apply you can expect to get a payment for March, April & May as a lump sum. The lump sum is equal to

  • Average Income over 16-17, 17-18, 18-19 tax years.
  • Divided by 12 to get monthly figure
  • Multiplied by 0.8 to get 80% of regular revenue (0.7 or 70% for August’s payment)
  • Multiplied by 3 to cover 3 months

Example

  • Income = £20,000, £18,000, £12,000
  • Average = £16,666
  • Monthly = £1388
  • 80% = £1111
  • 3 Months = £3333

Interaction with Universal Credit

If you get a SEISS payment it counts as income, this means two things

  • You will need to pay tax on it if you earn above the income tax allowance
  • It will reduce your Universal Credit (UC) payout.

Example One using nice simple round numbers:

  • Usual UC payment = £1000 per month
  • SEISS payment £1000
  • Reduction in UC = £630
  • Total income = £1370

Example Two, low income (£10k/pa), 34 year old, shared house

  • Usual UC payment = £760 per month
  • SEISS payment £2000
  • Reduction in UC = £760 (zero UC will be paid this month)
  • Total income = £2000

Example Three, Higher Income (£30k/pa), 36 year old, one bed flat

  • Usual UC payment = £1000 per month
  • SEISS payment £6000
  • Reduction in UC = £900 (zero UC will be paid this month)
  • Excess Earnings: £4500 will count against future UC payments
  • Tax payable: £1200
  • Total income = £4800

This means that your circumstances are going to make a big impact on how much the SEISS actually increases your monthly income.

*Here is where the troubles really start:

  • Had to have been trading in the tax year 2018-2019
  • Have to earn over 50% from self employment
  • Maternity isn’t accounted for, it just reduces your income
  • Low earning years bring down your average payment
  • losses count as 0 income bringing down your average
  • If you earn above £50k you get nothing, good day sir.

All of which means there are a lot of people who will get very little, less than they were expecting or perhaps nothing.

The whole scheme exemplifies the lack of creativity and care that are the hallmarks of our government at this time. With the opportunity to ignite a wave of investment by self employed workers across the country the best they could do was creative a narrow, exclusionary system that might just scrape by at maintaining the status quo, all while drastically failing people in a moment of crisis.