On 26 March, the Chancellor gave details of the Self-employment Income Support Scheme (SEISS), which will provide a welcome lifeline for many sole traders and partnerships in the rural sector.
The SEISS is for individuals, including members of partnerships, whose income has been adversely affected by the Covid-19 outbreak, where profits in previous years have been £50,000 or less. Grants will be worth 80% of average profit of the three latest tax years or be based on a 2018-19 tax return up to a ceiling of £2,500 per month.
“This will be a relief for many who operate in the rural sector as sole traders or in partnership, albeit promoted at present only for an initial three months. It may need to run for considerably longer than that as, for some, the impact from the current crisis may last for some time. Whilst the Chancellor has said that the scheme should cover 95% of those in self-employment there may still be measures required for those who have set up in business but have not been trading for long enough to submit their first tax return, and those whose annual profits are greater than £50,000 but who may see that figure reduce significantly in one stroke.
“The restrictions placed on many to go about their business, right across the board, will be hard hitting and universal, and who is to say that work will return to normal, or that there will be any work at all, once the immediate crisis is over? Moreover, some may not be able to wait until June for support through this new scheme to materialise.
“Those eligible should also note that HMRC will contact them in the first instance and that contact will then trigger the application process. HMRC has also warned that taxpayers should be aware of a number of scams emerging in relation to all government support schemes and to be cautious of any approaches that do not come from an official source.”