Everything you need to know about SEISS — the self-employment grant

Everything you need to know about SEISS — the self-employment grant

Self-employed workers are celebrating the Chancellor’s decision to extend the Self-Employment Income Support Scheme (SEISS), meaning more people can enjoy a slice of the funding.

The scheme was due to end in February 2021, but Rishi Sunak has added a further two phases which gives the funding cake a shelf life until the end of September 2021. There will also be extra tiers to include those who missed out on previous SEISS grants. 

“The latest round of SEISS covers thousands of new self-employed workers who didn’t qualify for earlier grants,” says Emma Roberts from OneClick Accountant.

This will be a huge relief for the workers and their families who have suffered during the coronavirus pandemic. You will be able to make claims from late April 2021, so it’s time to get all your financial paperwork in order.

To help you determine whether you qualify, Emma has produced a quick guide…

What is SEISS?

Part of the Government’s Covid-19 relief package, SEIIS was aimed at supporting self-employed people whose business profits were ‘adversely affected’ by the pandemic and subsequent lockdowns. 

The scheme was designed to deliver a grant which covered a proportion of expected profits over a set period. In order to qualify, you had to meet HMRC rules which included:

  • Submitting a self-assessment tax return for 2018/19 by 23 April 2020
  • Being self-employed in the 2019/20 tax year 
  • An intention to continue being self-employed during 2020/21 
  • Having a business which was adversely affected by Covid-19
  • More than 50% of your income in 2018/19 had come from self-employment profits up to £50,000. 

For those workers who failed the ‘profit test’ in 2018/19, HMRC made calculations based on previous tax years. 

HMRC used the 2016/17, 2017/18 and 2018/19 tax years to calculate average monthly profits, with businesses in the first grant receiving 80% with a monthly limit of £2500. This fell to 70% for the second grant with a monthly limit of £2190. The third round returned to 80% with a monthly limit of £2500. 

Grants do not have to be repaid, but they are subject to income tax and National Insurance.

What is the latest criteria?

Stages 4 and 5 will continue until September 2021. Stage 4 covers the period from March 1 to the end of April, offering 80% of three months’ average trading profits up to £7500. Any claims can be made as a single grant in late April. 

Stage 5 will run from May to September, with two levels of support. If turnover has fallen more than 30%, you can qualify for 80% of three months’ average trading profits up to £7500. If turnover has dropped less than 30%, you can claim 30% of three months’ average trading profits up to £2850. Stage 5 claims open from the end of July. 

To qualify, you must have filed a 2019/20 tax return by 2 March 2020. 

What is covered by ‘adversely affected’?

The HMRC has published guidance on the impact of Covid-19 on self-employed workers. It covers those who have been shielding, self-isolating or caring for someone during the pandemic. You can also claim if your business closed or was scaled down during the lockdowns.

You need to submit evidence of how your self-employed business has been hit, such as fewer invoices, lower turnover or closure of premises. 

Read the HMRC guidance here: https://www.gov.uk/guidance/how-your-trading-conditions-affect-your-eligibility-for-the-self-employment-income-support-scheme#impactedbyrd

How do I claim?

If you are eligible, you can claim online at www.gov.uk and will need to provide the following information:

  • Self-assessment Unique Taxpayer Reference (UTR)
  • National Insurance number
  • Government Gateway user ID and password
  • UK bank account details.

Need some help?

“If you run a self-employed business and have been struggling during the lockdown, were are here to help,” adds Emma. “Applying for Government funding sounds complicated, but our team of friendly, experienced experts can guide you through the SEISS process.”

If you would like professional advice, contact Emma Roberts at emma.roberts@oneclick.group.