Self-Employment Income Support Scheme Grant Extension increased to 80% for freelancers and the self-employed.

The Self-Employment Income Support Scheme (SEISS) supports self-employed workers and individuals in partnerships whose business is suffering as a result of coronavirus.

Earlier schemes have been in place for much of the year, offering varying levels of support. The latest version, the SEISS Grant Extension, was first announced as part of the Chancellor’s Winter Economy Plan.

The level of support available has now been increased from the proposed 20%, to 80%, to support sole trader businesses during the second lockdown.

How much can I claim using the SEISS Extension grant?

The extension covers a six-month period, divided into two taxable grants. Only the first part of the grant has been confirmed so far.

The second part of the grant will be announced nearer the time, giving the government chance to assess the situation.

Who is eligible to claim the SEISS Grant Extension?

The SEISS Grant Extension is to help self-employed workers experiencing less demand for work as a result of the COVID-19 pandemic.

The scheme allows self-employed workers, and individuals who are a partner in a partnership, to claim a taxable grant.

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!

Average trading profits

• 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.

Where your income comes from

Eligibility for the SEISS Grant Extension 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.

• More than 50%, of your earnings must be from your self-employed work. Those who receive the majority of their earnings from regular employment will not be eligible.

You’ll also need to confirm that you have been adversely affected by coronavirus.

Has my business 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:

• You’re shielding yourself or have caring responsibilities.
• You have to scale down because staff are unable to work.
• There’s less demand for your work because of social distancing rules and lockdown measures.

HMRC provide detailed guidance about what counts as being adversely affected by the outbreak in terms of applying for SEISS.

The qualifying period for the SEISS Grant Extension

The dates that your business is affected by COVID-19 conditions is also important. This is called the ‘qualifying period’.

The qualifying period for the first part of the SEISS Grant Extension is between 1 November 2020 and the date that you make your claim.

How do I calculate my Self-Employment Income Support Scheme (SEISS) Grant Extension claim?

Calculate the payments using your average monthly profits from over the last three financial years:

• 2016/17
• 2017/18
• 2018/19

The profits (or losses) from each year will be added together, and then divided by the number of years to work out your average profit.

Where three years isn’t feasible, for instance if the business isn’t old enough, HMRC will instead average the period they do have up to three years.

Working out your SEISS Grant Extension payment

Like the other payments, the SEISS grant extension is worked out using your average trading profits from the last three tax years.

HMRC have published a guide and examples which explain how your SEISS payment is worked out.

What happens to my SEISS claim if I’m in a partnership?

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.

Are directors eligible for the Self-Employment Income Support Scheme (SEISS)?

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.

HMRC sent me an invitation to apply for SEISS, but I don’t think I’m eligible

HMRC are inviting applicants to make a claim based on information from their 2018/19 tax return. If you don’t think that you are eligible but have received an invitation, double-check with them!

HMRC also have an online SEISS eligibility checking tool.

Will I have to repay money I get through the Self-Employment Income Support Scheme (SEISS)?

No, if you are eligible and make a successful claim for SEISS, you will not have to repay the support that you get.

Is the Self-Employment Income Support Scheme (SEISS) subject to tax and NI?

Yes, money paid to you as a SEISS grant will be subject to Income Tax and self-employed National Insurance.

Do I need to include my SEISS claims on my Self Assessment tax return?

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.

If you want to learn more about Self Assessment, download our introductory guide below, or find out how our online accountants can help you.

Can my accountant make my SEISS claim for me?

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.

How do I make a claim for the Self-Employment Income Support Scheme (SEISS) Grant Extension?

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:

• Self Assessment UTR – read our article on where to find your UTR if you’re not sure
• National Insurance number
• Government Gateway user ID and password
• Bank account number and sort code for the account where you would like the grant to be paid

When can I submit my claim for the SEISS Extension?

The scheme opens to online applications on 30th November 2020.

What happens after I submit my claim for the Self-Employment Income Support Scheme (SEISS)?

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:

• the amount claimed
• the claim reference number
• evidence which demonstrates your business has suffered as a result of coronavirus

How will my SEISS Grant Extension payment be paid?

Successful grant applications are paid within 6 working days, as a single instalment into your chosen bank account.

Can I still work if I receive a Self-Employment Income Support Scheme (SEISS) grant?

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.

What if I didn’t apply for the previous SEISS grants?

You can submit a claim for the SEISS Extension 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.

About The Author

Elizabeth Hughes

A content writer specialising in business, finance, software, and beyond. I'm a wordsmith with a penchant for puns and making complex subjects accessible.