The Self-employment Income Support Scheme (SEISS) is a temporary scheme set up by the government to help self-employed people get through the coronavirus pandemic.
It was initially designed to cover three months, paying out one lump sum to those affected, but it’s been extended to provide another three payments.
The government’s Self-employment Income Support Scheme (SEISS) might be described as the self-employed version of the Coronavirus Job Retention Scheme (CJRS) for employed people.
While you’ll still owe Income Tax and National Insurance on any money you get through the SEISS, it’s a grant rather than a loan. That means you won’t need to pay it back.
The amount available under the SEISS has varied for each payment:
At the end of 2020, SEISS was extended, with two more grants announced to cover the self-employed until April 2021.
While the fourth grant is supposed to cover February to April 2021, it’s expected that we’ll have to wait until the UK Budget on 3 March 2021 for more details – including the percentage of profits it’ll cover.
It’s difficult to know whether there’ll be another SEISS grant extension beyond April 2021. The Chancellor, Rishi Sunak, will likely outline plans for any further self-employed support in his Budget announcement. We’ll keep you updated as more information is announced.
HMRC works out your average trading profit by taking your total trading profits or losses for tax years 2016-17 + 2017-18 + 2018-19 and dividing by three.
If your average trading profit is £51,000, for example, you can then divide that by 12 to work out how much SEISS will cover you for three months. Here’s an example at the 80 per cent level for the third grant:
If you’re a sole trader, HMRC will work out your trading profit after allowable business expenses. They’ll do this by adding any losses brought forward from previous tax years to the amount shown on your tax return as ‘total taxable profits from this business’.
If you’re a member of a partnership, HMRC will work out your share of the partnership’s profit after adjustments. They’ll do this by adding any losses brought forward from previous years to the amount shown as ‘your share of the total taxable profits from the partnership’s business’.
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The scheme has been set up to provide financial support to self-employed people and people in partnerships who’ve been affected by the coronavirus pandemic.
If you weren’t eligible for previous grants, you haven’t been able to claim the newer ones either.
For the most recent grant, you needed to have been either currently trading but suffering reduced demand because of coronavirus, or temporarily unable to trade because of coronavirus.
Other SEISS eligibility means that you need to:
If you didn’t submit your 2018-19 Self Assessment tax return by 23 April 2020 you won’t be able to claim SEISS.
For the third grant, you needed to have a ‘reasonable belief’ that you’ll suffer reduced profits because of coronavirus – and you have to keep records to support the claim.
Gov.uk gives the example of a personal trainer whose gym has closed because of lockdown. As she can’t work in the gym, she’ll have a reasonable belief that her profits will reduce. There are more examples here, including what counts as not having a reasonable belief.
The deadline for applying for the third grant has now passed. Details of the fourth grant won’t be announced until 3 March 2021.
If you do apply, it’ll be useful to have the following information to hand:
You can check gov.uk’s business support pages for information as it’s announced.
You’ll find out whether you’ll get the grant as soon as you’ve made your SEISS claim. If they approve your claim, the money should come through within six working days.
Make sure you keep a copy of all records associated with your claim, the same as you would for all your other self-employed records. You should keep a record of:
This is so you can report your grant:
Unlike furloughed employees under the CJRS, the SEISS allows self-employed people to continue working. You’re also free to start a new trade, employment, volunteering, or be an armed forces reservist.
You can read about other financial help you may be eligible for in our article on coronavirus support for small business and the self-employed. We’ve also got a guide to small business grants if you’re looking specifically for funding you don’t have to pay back.
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