The Self Employed Income Support Scheme (SEISS) aims to help those who are adversely affected by the coronavirus crisis and who cannot run their business and earn as normal. It is significantly different to the Coronavirus Job Retention Scheme which operates for employed individuals and has some inherently unfair and confusing rules.
The SEISS rules are stringent: if key deadlines are missed, then the chance to make any claim is lost; there is a cap on earnings; and individuals need to make their claims using their own Government Gateway account.
The first deadline was to ensure that tax returns for the 2018/19 tax year were submitted by 23 April 2020. If this was missed without a very good reason, no claim can be made. The next looming deadline is 13 July to claim the first grant. Miss the date and the chance to claim up to £7,500 is lost.
While the scheme is welcomed, there are some significant issues with the way the scheme operates:
- The 13 July deadline for claiming the first grant is different to the deadline for employers claiming under the Coronavirus Job Retention Scheme, which is 31 July. This could be confusing, especially if self-employed individuals are also making claims for their furloughed staff. Why not make the deadline the same for both schemes?
- The scheme has an income cliff-edge of £50,000. While no one expects the government to fund large self-employed earnings, it doesn’t make sense that someone earning £51,000 can claim nothing while someone with £50,000 of earnings can claim up to £7,500.
- The scheme requires that the self-employed income of the individual should be more, or at least equal to, other income. In other words, if someone has undertaken extra self-employed income to top up their low-paid job, or is starting a new venture alongside their employment, they will not be eligible for help under the SEISS if their employment and other income are more than the trading income. Even if their job entitles them to furloughed payments at 80 per cent of their earnings, their total income in this period could be hugely reduced because they will not be able to claim any grant for their loss of self-employed income.
- Individuals have to make their own claim, rather than through an agent or accountant. This means they will need to be IT literate, have online access and, importantly, have a Government Gateway account. All these small hurdles could cause a delay and if left too late could result in the claim deadline being missed.
It is recognised that the Government coronavirus support measures have been generous. However, it seems unfair to penalise those who, arguably, take the greatest risks through entrepreneurialism and self-employment. There needs to be an urgent review of these issues before the first claim period deadline arrives.