Definition of trading profits for SEISS
Topic:-Definition of trading profits for SEISS
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.
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