Updated 28 April to give more details about the fourth and fifth SEISS grants.
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 was soon extended to provide further payments.
The government’s Self-employment Income Support Scheme (SEISS) can be described as the self-employed version of the Coronavirus Job Retention Scheme (CJRS) for employed people.
The amount available under the SEISS has varied for each payment:
The government extended SEISS at the end of 2020 to cover the self-employed until April 2021.
And following considerable speculation, the Chancellor unveiled details of a fifth and final grant during the Spring Budget announcement.
It’s expected that the self-employed should be able to access the fifth SEISS grant in July, which is due to cover May to September.
While it will cover a five-month period, the fifth SEISS grant will still only be worth three months of average trading profits.
The good news is that for the fourth and fifth grants, SEISS eligibility is wider – it should cover people newer to self-employment, as it now takes 2019-2020 tax returns into account.
As long as you filed your 2019-2020 tax return by 2 March, you should be able to apply.
HMRC previously worked 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.
For the fourth and fifth grants, HMRC will also take your 2019-2020 records into account.
As an example, if your average trading profit over the four tax years is £45,000, 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 fourth 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.
For the fourth grant, you need to be 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’re not eligible based on your 2019-20 return, HMRC will then look at the tax years 2016-17, 2017-18, 2018-19, and 2019-20.
You need 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 on the government website, including what counts as not having a reasonable belief.
The deadline for claiming the fourth grant is 1 June 2021. The claims portal for the fifth grant should then open in July 2021.
Gov.uk says that HMRC should’ve contacted you in mid-April if you’re eligible, to give you your personal claim date.
When you do apply, it’ll be useful to have the following information to hand:
You can check gov.uk’s SEISS guidance for more details.
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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