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Earlier schemes have been in place for much of the year, offering varying levels of support. The government’s 2021 Spring Budget confirmed that grant funding would continue to be available for self-employed workers.
The amount of funding available through the self-employed grant varies depending on which period you need help with, and how badly your business is affected. We explain the terms in more detail below.
This period will be the fourth time that the SEISS grant has been offered. It provides up to 80% of 3 months worth of your average trading profits, and will be paid as a single instalment worth up to a maximum of £7,500.
You will be eligible to claim if you submitted your 2019-20 Self Assessment tax return by midnight on 2nd March 2021. This tax return will also be used as part of the calculation for the amount you can claim. The scheme is due to open from mid April onwards for this period.
During this period, the amount of your SEISS claim will depend on how much your business’ turnover has reduced in the April 2020 – April 2021 tax year because of the pandemic.
SEISS is available to self-employed workers and individuals who are a partner in a partnership that are experiencing less demand for work as a result of the COVID-19 pandemic.
As with previous rounds of the scheme, HMRC are identifying eligible applicants and inviting them to submit a claim. But, if you think that you’re eligible and don’t hear from HMRC, check with them!You also must have been trading in both 2019-20, and 2020-21.
The scheme is only available for businesses whose average yearly profits do not exceed £50,000. The key word here is average.
Your trading profits might be more than £50,000 in one tax year, and at a loss the next, resulting in an average profit which is lower than the £50,000 threshold, making you eligible to apply.
Eligibility for the grant also considers how you earn your money. This is because the scheme is designed to provide support to those who rely on their self-employed income.
You’ll also need to confirm that you have been adversely affected by coronavirus.
The grant is only available for those whose businesses are suffering as a result of coronavirus. This largely refers to the way that COVID-19 is affecting your ability to work as you would normally expect to do so.
For instance, this might be because:
The amount of grant is based on 3 months worth of your average profits (or losses) over the last few years of trading, up to a maximum of 4 years:
Each year will be added together, and then divided by the number of years to work out your average profit. Where there aren’t enough years to work out your claim, for instance if the business isn’t old enough, HMRC will instead average the period they do have.
If your self-employed income comes from being in a partnership, you only need to use your share of the profits to calculate your SEISS claim.
Unfortunately, directors of limited companies are not eligible to apply for a grant under the Self-Employment Income Support Scheme (SEISS).
A self-employed person or sole trader means someone who works for themselves in business. Directors are technically employees of their company which means they’re not able to claim SEISS. Find out what help is available for directors dealing with the impact of coronavirus.
No, if you are eligible and make a successful claim for SEISS, you will not have to repay the support that you get.
Yes, money paid to you as a SEISS grant will be subject to Income Tax and self-employed National Insurance.
Yes, because SEISS is subject to tax and NI, you’ll need to include the SEISS grant you receive on your Self Assessment tax return.
Unfortunately, HMRC say that applicants must make applications for SEISS themselves. Your accountant or tax agent will be able to use the online eligibility checking tool on your behalf, but will not be able to submit a SEISS claim for you.
Because your accountant or tax adviser can’t make a SEISS claim for you, you’ll need to do it yourself.
As you’ll be making your own claim, you’ll need to set up a Government Gateway account if you don’t already have one. This only takes a few minutes to do online.
You should make sure that you have the Self Assessment service connected to that gateway account. If you don’t already have this bit set up, you’ll need to request an activation code from HMRC, which can take a few weeks.
You’ll need to know (or set up) your:
Applications for the fourth grant opens from the end of April (to give HMRC time to process Self Assessment claims) and will be available until the end of May 2021. The fifth round will open at the end of July 2021, though full details are not yet available.
HMRC have said that applicants for the SEISS grant will find out if their claim is successful straight away.
Because you’ll need to include details of the grant on your next Self Assessment tax return, make sure you take a note of:
Successful grant applications are paid within 6 working days, as a single instalment into your chosen bank account.
Yes, you can continue working even whilst claiming the SEISS grant. You’re also able to start a new trade, volunteer, or start work for an employer.
You can submit a claim for the SEISS even if you haven’t claimed before.
Find out more about business support for COVID-19 at our information hub, or find out how our online accounting services can help.
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