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COVID-19: Self-Employment Income Support Scheme (SEISS). Support for the self-employed during the Coronavirus crisis. 

At a glance

SEISS grants currently cover the following periods

Name Claim period Claim deadline Grant size
Fifth grant May 2021 - Sept 2021 TBA Up to £7,500
Fourth grant Feb 2021 - April 2021 1 June 2021 Up to £7,500
Third grant Nov 2020 - Jan 2021 29 Jan 2021 Up to £7,500
Second grant 14 July - Oct 2020 19 Oct 2020 Up to £6,570
First grant March - July 2020 13 July 2020 Up to £7,500


Note
: Company directors are employees for PAYE purposes and not self-employed, see COVID-19: Company directors

 

Fifth grant 

Fourth grant (now closed)

Third grant (now closed)

First and second grants (now closed)

What's new?

Overview: Fourth grant

Fourth grant: February, March and April 2021 

The fourth SEISS grant will: 

Eligibility

Self-employed individuals and members of a partnership can claim. 

Currently trading: reduced demand 

This might include where you: 

You must not claim if the only impact on your business is increased costs. For example, if you have had to purchase face masks and cleaning supplies. This would not be considered as reduced activity, capacity or demand.

HMRC have given a number of examples of reduced demand: How your trading conditions affect your eligibility for the SEISS.

If you are currently trading but have reduced demand due to Coronavirus you must keep evidence to support this fact at the time of your claim. Examples may include: 

Unable to trade

If your business is temporarily unable to trade due to Coronavirus, you must keep evidence, such as:

If you had to close before 1 February 2021 and continued to be closed for a period of time up to 30 April 2021, you can still claim as long as you are eligible.

HMRC have given a number of examples of being unable to trade: How your trading conditions affect your eligibility for the SEISS.

How to claim 

Newly eligible taxpayers 

Information needed to claim

You will need your: 

Taxpayers must make the claim directly. If tax agents or advisers claim on behalf of clients this will trigger a fraud alert, which will delay payment.

Record keeping

Details must be kept of: 

If your business recovers after you have claimed, your eligibility will not be affected.

Compliance

Tax return amendments: HMRC notification

Notification deadline and penalties

How to notify HMRC

Members of partnerships

New parents

Loan charge 

You may be able to claim a grant if you:

Your 2019-20 return must have been submitted by 3 March 2021 and you must have continued to trade in tax year 2020-21 and intend to continue to trade in 2021-22.

Averaging relief 

If you are a self-employed farmer, market gardener, creative author or artist claiming averaging relief HMRC will use the amount of profit before the impact of the averaging claims to work out:

Non-UK residents

Non-UK residents and non-domiciled individuals claiming the remittance basis may be eligible for the grant, subject to confirming certain criteria with HMRC. 

Trading profits

To be eligible for a grant, trading profits must be:

What is trading income?

A 'trade' includes a trade, profession or vocation chargeable to Income Tax whether from self-employment or in a partnership.

For the grant, profits and losses of all trades in the year are added together. 

What is non-trading income?

Total income means the total of:

It does not include losses.

Average trading profits

HMRC example

   2016-17 2017-18 2018-19 2019-20 Average Total
Trading profit (£)   50,000  50,000  36,000  (10,000)  31,500  126,000
Non-trading income (£)  15,000 15,000 16,000 15,000 N/A  61,000 

 

Calculating the grant 

Continuing with the above example, average trading profits were £31,500. 

The grant calculated of £6,300 is below £7,500: £6,300 is due to be paid.  

Overview: Third grant

Third grant: 1 November 2020 to 29 January 2021

In order to qualify for the third grant: 

Currently trading: reduced demand 

This might include where you: 

You must not claim if the only impact on your business is increased costs. For example, if you have had to purchase face masks and cleaning supplies. This would not be considered as reduced demand.

HMRC have given a number of examples of reduced demand: How your trading conditions affect your eligibility for the SEISS.

If you are currently trading but have reduced demand due to Coronavirus you must keep evidence to support this fact at the time of your claim. Examples may include: 

Unable to trade

If your business is temporarily unable to trade due to Coronavirus, you must keep evidence, such as:

If you had to close before 1 November 2020 and continued to be closed for a period of time up to 29 January 2021, you can still claim as long as you are eligible.

HMRC have given a number of examples of being unable to trade: How your trading conditions affect your eligibility for the SEISS.

Information needed to claim

You will need your: 

Taxpayers must make the claim directly. If tax agents or advisers claim on behalf of clients this will trigger a fraud alert, which will delay payment.

Details must be kept of: 

Members of partnerships

New parents

Loan charge 

You may be able to claim a grant if you have:

Averaging relief 

If you are a self-employed farmer, market gardener, creative author or artist claiming averaging relief HMRC will use the amount of profit before the impact of the averaging claims to work out:

Non-UK residents

Non-UK residents and non-domiciled individuals claiming the remittance basis may be eligible for the grant, subject to confirming certain criteria with HMRC. 

What is trading income?

A 'trade' includes a trade, profession or vocation chargeable to Income Tax whether from self-employment or in a partnership.

For the grant, profits and losses of all trades in the year are added together. 

What is non-trading income?

Total income means the total of:

It does not include losses.

Average trading profits

Profit tests

HMRC give the following example:

 

2016-17

2017-18

2018-19

Total for the 3 tax years

Trading profit

£50,000

£50,000

£(10,000)

£90,000

Pension income

£15,000

£15,000

£15,000

£45,000

Total income

£65,000

£65,000

£5,000

£135,000

Trading profit is half or more of your total income

Yes

Yes

No

Yes

 

 

 

 

 

 

 


Despite the loss in the tax year 2018-19, you would still be eligible for the grant because your average trading profit for the three tax years:

Overview: First and second grants

 

Eligibility for the initial SEISS grants (the first and second grants)

You can claim one or both of the initial grants, only if your business is 'adversely' affected by Coronavirus. 

To claim the second grant your business must have been adversely affected on or after 14 July 2020.

Your business may be adversely affected if any of the following apply:

Restrictions on trading:

Restrictions on you personally:

HMRC provides examples of situations were a business affected here.

You should keep records to show that you have been adversely affected to include:

Qualifying conditions

The same conditions apply to both rounds of grant funding.

These conditions relate to eligibility for the grants and not to the amounts you will receive if you do qualify, details of which are set out at 'How will the grant be calculated?' below. 

You are self-employed and you:

Additionally, more than half of your total income comes from self-employment.

One of the following conditions A to C must be met to be eligible for the scheme:

    1. Your trading profits/partnership trading profits are between £0 - £50,000 for 2018-19 and those trading profits are more than half of your total taxable income for that year, or
    2. Your average trading profits/partnership trading profits for the three years 2016-17, 2017-18, and 2018-19 are between £0 - £50,000 and your average trading profits for those years are more than half of your total taxable average income for those same years, or
    3. If you did not trade in 2016-17, your average trading profits/partnership trading profits for the two years 2017-18, and 2018-19 are between £0 - £50,000 and your average trading profits for those years are more than half of your total taxable average income for those same years.

From July 2020: proposed modified extra condition for parents, including adoptive ones, who took time out of trading to care for their children within the first 12 months of the birth of the child or within 12 months of an adoption placement:

Loan charge payers

The qualifying profits conditions are modified for persons who are subject to the loan charge. A person is subject to the loan charge if:

(a) on 26 March 2020 the person is chargeable to Income Tax on any amount by reason of Schedule 11 or 12 to the Finance (No. 2) Act 2017 (loan charge) as enacted as at that date, or

(b) the person would be so chargeable but for entering into a contract settlement on or after 20 December 2019.

If you are a Loan Charge payer, one of the following conditions D or E must be met.

D. If you were not trading in 2016-17, your trading profits/partnership trading profits are between £0 - £50,000 for 2017-  18 and those trading profits are more than half of your total taxable income for that year, or

E. Your average trading profits/partnership trading profits for the two years 2017-18, and 2016-17 are between £0 - £50,000 and your average trading profits for those years are more than half of your total taxable average income for those same years.

In addition (for loan charge payers only) you do not have to file your 2018/2019 Self Assessment tax return by 23 April 2020 as the 30 September 2020 loan charge settlement deadline still applies.

Non-UK residents

Non-UK residents and non-domiciled individuals claiming the remittance basis:

Scottish taxpayers: Newly self-employed

Quick checker

New parents, added 26/6

FAQs

Who is self-employed?

What is trading income?

A 'trade' includes a trade, profession or vocation chargeable to Income Tax.

What is total income?

Total income means the total of:

It does not include losses. (This was added 20 July.)

Farmers, market gardeners and authors: Averaging

Trading periods

If you started trading between the years 2016 to 2019, HMRC will only use those years for which you filed a Self Assessment tax return.

Profit tests

HMRC give the following example (14 April 2020):

 

2016 to 2017

2017 to 2018

2018 to 2019

Total for the 3 tax years

Trading profit

£50,000

£50,000

£(10,000)

£90,000

Pension income

£15,000

£15,000

£15,000

£45,000

Total income

£65,000

£65,000

£5,000

£135,000

Trading profit is half or more of your total income

Yes

Yes

No

Yes

 

So even if you made a loss in the tax year 2018 to 2019, you would still be eligible for the grant because your average trading profit for the three tax years:

Making a claim

1. HMRC's online eligibility checker checks what has been reported under Self Assessment.

2. HMRC's SEISS claims portal went live on 13 May 2020. 

3. Claims for the first three months of the grant must be made by 13 July 2020.

4. Claims for the second and final three months commencing in August 2020 and must be made on or before 19 October 2020.

How is the grant being calculated?

The amount of SEISS payment for the first three month period is the lower of:

a) £7,500 (1st grant) and

b) (Average* trading profit/12) x 80% x 3

This means that you need to have made a past average profit of £37,500 in order to expect to receive the full £7,500.

The amount of the SEISS payment for the second and final three month period is the lower of:

a) £6,570 (2nd grant) and

b) (Average* trading profit/12) x 70% x 3

This means that you need to have made a slightly higher past average profit, of £37,543, in order to expect to receive the full £6,570.

*To work out the average HMRC will add together the total trading profit for the three tax years, or less, if you have been trading a shorter time and then divide by three or the number of months and use this to calculate a monthly amount.

On 14 April 2020 HMRC provided additional guidance and examples as to how they will work out trading income for the purposes of the scheme. They will take taxable trading profits after:

HMRC examples:

Example 1

If your total trading income (turnover) in each of the tax years 2016 to 2017, 2017 to 2018 and 2018 to 2019 was £20,000 and you claimed the £1,000 trading allowance each year:

This is worked out as:

  1. £20,000 deduct the trading allowance of £1,000 = £19,000.
  2. Multiply £19,000 by 3 = £57,000.
  3. Divide £57,000 by 3 = £19,000.

Your average trading profit would be £19,000.

Example 2: You have more than one trade in the same tax year

We will add together all profits and losses for all these trades to work out your trading profit.

If you only traded in the tax year 2018 to 2019 and made a £60,000 profit for your first trade, and then a £20,000 loss for your second trade, your trading profit for that year would be:

Trade 1 £60,000 profit deduct trade 2 £20,000 loss = £40,000

Example 3: You have traded for more than one year

To work out your average trading profit we will add together all profits and losses for all tax years you’ve had continuous trade.

If you made:

Add £60,000 and £60,000 then deduct £30,000 loss = £90,000

Then divide £90,000 by three.

Your average trading profit for the three tax years would be £30,000.

Example 4

If you did not trade in the tax year 2016 to 2017 but made:

Add £25,000 and £45,000 = £70,000.

Then divide £70,000 by two.

Your average trading profit for the two tax years would be £35,000.

Averaging relief 

If you are a self-employed farmer, market gardener, creative author or artist claiming Averaging relief HMRC will use the amount of profit before the impact of the averaging claims to work out:

I think I have been paid too much, what should I do? 

You must tell HMRC if you think your grant has been overpaid or that you should not have claimed, as if you do not you may be charged a penalty of up to 100% of the grant amount. You can do this online here.

If you received the grant:

If you did not know you were ineligible for the grant when you received it, HMRC will only charge a penalty if you have not repaid the grant by 31 January 2022. 

Finance Act 2020 includes details of the powers HMRC will have to deal with incorrect claims. They will be able to:

The  legislation also sets out that the circumstances in which a person is not entitled to a Coronavirus support payment include where they cease to be entitled to it after they have received it because of a change of circumstances.

Members of partnerships

Tax and benefit implications

The grants are subject to tax and NIC as self-employed income. The legislation for the tax treatment of the grants is included in clause 19 schedule 1 of Finance Bill 2020 which provides that:

VAT implications

HMRC have not provided any guidance as to whether the grants will be subject to VAT or count towards turnover for VAT registration limits. Normal principles are expected to apply to mean:

If you did not submit your Income Tax Self Assessment tax return for the tax year 2018-19 by 31 January 2020, you must have done so by 23 April 2020.

HMRC are using data on 2018/19 returns already submitted to identify those eligible and will risk-assess any late returns filed before the 23 April 2020 deadline in the usual way.


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