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) is essentially the self-employed version of the furlough scheme.
The amount available under the SEISS has varied for each payment:
Applications for the fifth SEISS grant open in July 2021 and close on 30 September. As most remaining restrictions ease, the fifth grant will be the final one.
It covers five months from May to September, but it will still only provide three months of average trading profits.
As long as you filed your 2019-2020 tax return by 2 March 2021, you should be able to apply.
For the fifth SEISS grant, there’s a new test that determines how much your turnover has fallen. That’s because if your turnover has fallen by more than 30 per cent, you get 80 per cent of average profits (capped at £7,500). You get 30 per cent of profits if it’s fallen by less than 30 per cent (capped at £2,850).
With this in mind, you need to get two figures ready for HMRC before you apply – your turnover for the pandemic period and your turnover for a reference period.
Pandemic period – this is a 12-month period starting on any date between 1 and 6 April 2020. The calculation can be the same figure that’ll be on your 2020-21 tax return (you don’t need to submit it before you apply, but HMRC will check that the two match). The figure is for all of your business, but it should exclude any other support payments you’ve received (like previous SEISS grants).
Reference period – this is your turnover figure for the 2019-20 tax year, but HMRC says you can use 2018-19 if 2019-20 wasn’t a normal year for your business.
HMRC won’t ask for your turnover figures if you started trading in 2019-20 and didn’t trade in 2018-19, 2017-18, and 2016-17.
The online service will compare the two figures and tell you which amount you’ll get.
Read more about working out your turnover for HMRC at gov.uk.
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 also takes 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 fifth 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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For the fifth 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 fifth SEISS grant is 30 September 2021. The claims portal for the fifth grant opens in July 2021.
Gov.uk says that HMRC should contact you in July if you’re eligible, to give you a date you can make your claim from.
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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