Definition of trading profits for SEISS

By P&A Knowledge Team · 20 May 2020 ·

Posted in Business Support

The Self-employment Income Support Scheme (SEISS) opened for applications on 13 May 2020. HMRC has confirmed that by midnight on 17 May there had been a total of 2 million claims with over £6.1 billion claimed. The scheme will provide grants of up to £2,500 per month based on 80% of average profits to qualifying applicants.

The initial grant is for the three months, from 1 March through to the end of May 2020. The government has not yet confirmed whether this scheme will be extended, past the current expiration date of 31 May.

The self-employed can only make a claim if their business has been adversely affected by Coronavirus. For most claims, the grant will be based on average trading profits over the tax years 2016-17, 2017-18, 2018-19. To be eligible, trading profits must be no more than £50,000 and at least equal to non-trading income.

HMRC will assess eligibility for the grant based on trading profits and non-trading income from Self-Assessment tax returns. Trading profits are calculated as the profits from self-employment or partnership tax calculation after deducting any allowable expenses. HMRC will not deduct any losses brought forward from previous years or the personal allowance.

Definition of trading profits for SEISS
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