To ask the Chancellor of the Exchequer, what support he plans to make available to recently self-employed people who are ineligible for the Self-Employment Income Support Scheme as a result of their 2018-19 self-assessment tax return including a one-off redundancy payment which HMRC classes as non-traded income.
The Self-Employment Income Support Scheme (SEISS), including the eligibility requirement that an individual’s trading profits must be at least equal to their non-trading income, is designed to target those who most need it, and who are most reliant on their self-employment income.
If an individual is not eligible based on their 2018-19 Self Assessment return, HM Revenue & Customs will then look at their Self Assessment returns from 2016-17, 2017-18 and 2018-19 to determine their eligibility. This reduces the impact of one-off events, such as a redundancy payment, in determining eligibility. More detail is available at www.gov.uk/guidance/how-hmrc-works-out-total-income-and-trading-profits-for-the-self-employment-income-support-scheme#eligibility.
The first £30,000 of a termination payment is not chargeable to income tax and is therefore not included in the calculation of an individual’s non-trading income. This further reduces the impact that a redundancy payment may have on eligibility for the SEISS.
Individuals who received more than half their income from non-trading sources in 2018-19 and did not have trading profits from earlier Self Assessment returns may still be eligible for other elements of the financial support provided by the Government. The SEISS is one element of a comprehensive package of support for individuals and businesses, including Bounce Back loans, tax deferrals, rental support, increased levels of Universal Credit, mortgage holidays, and other business support grants. More information about the full range of business support measures is available at www.gov.uk/government/collections/financial-support-for-businesses-during-coronavirus-covid-19.