Self-Employment Income Support Scheme Extension (SEISS) (updated 25th March 2021)

The Self-employment Income Support Scheme (SEISS) will provide grant support to self-employed individuals (including members of partnerships) whose income has been negatively impacted by COVID-19.

In his Budget on 3 March 2021, the Chancellor of the Exchequer, the Rt Hon Rishi Sunak MP announced an extension of the UK-wide Self Employment Income Support scheme to September 2021, with 600,000 more people who filed a tax return in 2019-20 now able to claim for the first time.

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Is this grant subject to tax?

Yes – individuals will pay Income Tax and National Insurance on any payments received through this scheme as they are replacement for income in line with normal practice for benefits or grants that replace income. The grant is recognised as income for the purposes of Universal Credit and Tax Credits and may impact the amount claimants are entitled to.

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What should self-employed people do while they wait to be paid?

In the interim, self-employed individuals may be eligible for universal credit. The government has provided over £6.5bn of additional support through the welfare system for those affected by Coronavirus.

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Why does this scheme not cover small businesses who are incorporated?

Self-employed individuals who are owner-managers and pay themselves a salary through PAYE will be eligible for support through the Coronavirus Job Retention Scheme (CJRS). SMEs can also access support through the temporary Coronavirus Business Interruption Loan Scheme (CBILS) . This supports SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years, and extension up to 10 under Pay As You Earn.

This new Self-Employment Income Support Scheme is open to anyone who reports trading profits through Income Tax Self-Assessment. Self-employed individuals who work through a company do not report their trading profits in this way.

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Who Can Claim

To be eligible for the fourth grant you must be a self-employed individual or a member of a partnership.

To see if you’re eligible, look at your 2019 to 2020 Self-Assessment Tax Return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income.

The grant will be set at 80% of 3 months’ average trading profits, paid out in a single instalment, capped at £7,500. The fourth grant will take into account 2019 to 2020 tax returns and will be open to those who became self-employed in tax year 2019 to 2020. The rest of the eligibility criteria remain unchanged.

Your eligibility for the scheme will now be based on your submitted 2019 to 2020 tax return. This may also affect the amount of the fourth grant which could be higher or lower than previous grants you may have received.

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You must also have traded in both tax years:

• 2019 to 2020 and submitted your tax return by 2 March 2021
• 2020 to 2021

You must either:

• be currently trading but are impacted by reduced demand due to coronavirus
• have been trading but are temporarily unable to do so due to coronavirus

You must also declare that:

• you intend to continue to trade
• you reasonably believe there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus

Find out if you’re eligible for the fourth grant which will cover the period February 2021 to April 2021.

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How to Claim

The online claims service for the fourth grant will be available from late April 2021 until 31 May 2021.

If you are eligible, HMRC will contact you in mid-April to give you your personal claim date. This will be the date that you can make your claim from.

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To apply, you will need your:

• Self Assessment Unique Taxpayer Reference (UTR)
• National Insurance number
• Government Gateway user ID and password
• UK bank details including account number, sort code, name on the account and address linked to the account
• Only provide bank account details where a BACS payment can be accepted

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You may also need to answer questions about your passport, driving licence or information held on your credit file.

You must make the claim yourself. A tax agent or adviser cannot claim on your behalf as this will trigger a fraud alert, which will delay your payment.

Further Support

The UK Government has announced that there will be a fifth and final grant covering May to September.

You will be able to claim from late July if you are eligible for the fifth grant.

The amount of the fifth grant will be determined by how much your turnover has been reduced in the year April 2020 to April 2021.

The fifth grant will be worth:

• 80% of 3 months average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more
• 30% of 3 months average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%.

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