The Self-Employment Income Support Scheme (SEISS) is made up of four taxable Government grants for self-employed individuals whose businesses have been adversely affected by coronavirus. There were initially only two grants, but last month Chancellor Rishi Sunak announced that a third and fourth grant will be rolled out. This means Government support for the self-employed will now be extended until 30 April 2021. But there is now effectively 12 months’ worth of support over a period covering 14 months. Here’s what Martin has to say.
The four grants are more or less identical – the only differences are when they’re available and how much you can get. The Government has confirmed that the eligibility criteria remains the same (for now). For ALL the grants, you need to have been adversely affected by coronavirus during the period the grant is running for. Unsure what “adversely affected” means? We’ve detailed examples and help.
So here’s the lowdown on how they work:
How much can I get?
- CLOSED. Grant 1:
– When is it available? This is now closed, but it was available from 13 May to 13 July 2020.
– How much can you get? It was worth up to £7,500 in total. This was made up of 80% of three months’ worth of average monthly trading profits capped at £2,500/mth. - CLOSED. Grant 2:
– When is it available? This is now closed, but it was available from 4 July to 19 October 2020.
– How much can you get? It was worth up to £6,570 in total. It was made up of a single payment made up of 70% of three months’ worth of average monthly trading profits over three months capped at £2,190/mth. You needed to have been adversely affected by coronavirus on or after 14 July 2020 to claim it. - Grant 3:
– When is it available? It’s not open yet, but will cover the period from 1 November 2020 until 31 January 2021.
– How much can you get? A lump sum covering 20% of three months’ worth of average monthly profits up to a total of £1,875. You will be asked to declare that your business has been impacted between 1 November 2020 and the date of your claim. - Grant 4:
– When is it available? It’s not open yet, but will cover the period from 1 February until 30 April 2021.
– How much can you get? The Government has not confirmed the amount or any other details.
What is the eligibility criteria for the first, second and third grants?
The eligibility criteria for SEISS is currently the same for ALL four grants. However, the Government has left room to tweak the eligibility criteria for the fourth grant, so we don’t know yet how that one will work. But for now, to make a claim (or have made a claim in the past) for any of the SEISS grants, you need to fulfil the following criteria…
- You must have filed a tax return for 2018/19. This means you must have been self-employed prior to 6 April 2019. The last possible moment to file a 2018/19 tax return was 23 April 2020 (the deadline had been extended from 31 January 2020). If you only had a few months’ self-employment on your 2018/19 return, this is counted as your total profit for the year – the Government won’t pro-rata it based on your monthly profits.
- You must earn more than 50% of your total income from self-employment. To check this, HMRC will first look at your your 2018/19 tax return to see if it was the case then. If you’re not eligible based on 2018/19 alone, it will then look at the tax years 2016/17, 2017/18 and 2018/19 to see if the average of your trading profits across the three years were more than 50% of your total income.
Income from property, dividends, savings, pensions and taxable benefits all count as “non-trading income” and, to qualify for the SEISS, the total of these combined must NOT exceed 50% of your total income. Confused about what counts as “taxable income”? Here’s our full list. - Your average trading profit must be less than £50,000/year. This is essentially a ‘cliff-edge’ requirement – so those whose average annual trading profit is more than £50,000 (to be specific, £50,000.01 and above) won’t be able to get any support from this scheme.
Again, HMRC says it will first check your 2018/19 tax return – if you met the requirements that year, you’ll be eligible. However, if you earned more than £50,000 (or earned less than half of your income from self-employment) in 2018/19, it’ll check your 2016/17 and 2017/18 tax returns if you filed them for those years. If on average over the three years you earned less than £50,000 and made more than half your income from self-employment, you’ll be eligible. See more info below if you made a loss. - You CAN keep working if you claim the grant. You do not need to prove coronavirus impact, though you need to declare your business has been impacted for the period you’re claiming for. HMRC will check for fraudulent claims.
- You don’t need to have applied for an earlier grant to get the others. As long as you meet the eligibility criteria, it is possible to apply for just one or any combination of the four grants.
- You can also apply for and get universal credit (SEISS doesn’t make you ineligible). But once you start receiving self-employed income support too then this will be classed as income, meaning the amount of universal credit you receive will decrease. But you will NOT have to pay back previous months of universal credit because of your SEISS payment. If you can wait, in some cases it could be worth delaying your SEISS application to maximise your universal credit award. We have all the details in our Coronavirus Universal Credit & Benefits guide.
- You must be actively trading and intend to continue to trade. You will need to declare that you are trading and intend to continue to trade when you apply.
- You can claim the grants on top of local lockdown payments. You can get both, however you must be trading and intending to continue to trade at the time of application for the SEISS grant.
The SEISS has been extended, but there are two ‘missing months’
When the Government first announced the SEISS grant, its own press release from 26 March 2020 stated: “The income support scheme… will cover the three months to May,” ie, March, April and May.
Then it announced a second grant covering another three months’ worth of trading profits. Logic (and basic counting) would suggest that this second three-month grant would cover June, July and August – but to get this you strangely had to declare your work was impacted only after mid July.
But after initially setting out that the three-month grants corresponded to actual specific months of business disruption, HMRC then said that the grants don’t relate to specific months after all. They are just grants, it said, though each is based on three months of trading profits.
Now a third grant kicks in on 1 November 2020 and runs until 31 January 2021, and a fourth will run from 1 February 2020 to 30 April 2021. Each covers three months’ worth of support.
So do the maths
That’s a 12 months of grants in total to cover 1 March 2019 to 30 April 2021, a total of 14 months. That leaves two months missing, which in our view are September and October.
How to apply for a SEISS grant
You need to apply via the official Government claims portal. Not sure you’re eligible? The application will tell you if not.
To apply, or check, you need the following information:
- Self-assessment unique taxpayer reference (UTR) – if you do not have this, find out how to get your lost UTR
- National insurance (NI) number – if you do not have this, find out how to get your lost NI number
- Government Gateway user ID and password – if you do not have a user ID, you can create one when you make your claim
- UK bank details (only provide bank account details where a Bacs payment can be accepted) including the: bank account number, sort code, name on the account, address linked to your bank account. IMPORTANT: You must make the claim yourself. Your tax agent or financial adviser must not claim on your behalf as this will trigger a fraud alert.
DATA/INFORMATION SOURCE: MSE