COVID-19 Self-Employment Income Support Scheme (SEISS). HMRC's claims portal for the second grant opens in August 2020. 

At a glance

Support for the self-employed during the coronavirus crisis:

  • Two separate taxable grants are claimable:
    • First grant for the period ending 13 July 2020.
    • Second grant for the period from 14 July 2020.
  • The grant payable is the lower of:
    • £7,500 (if claiming for the first grant), or £6,570 (if claiming for the second grant) and
    • 80% of your average monthly profits over the three years 2016/17, 2017/18 and 2018/19* for the first three months, reducing to 70% of the same average profits for the second three months.
  • The grant was initially capped for three months and has subsequently been extended.
  • An variation of the second grant was announced on 23 June and applies to new parents.
  • The grant is available to self-employed individuals:
    • With trading profits up to £50,000 per year whose majority of income comes from being self-employed.
    • Who have been adversely affected by the coronavirus crisis.
  • If you receive the grant you can continue to work or take on other employment including voluntary work. 

  • You do not have to have claimed the first grant to be able to claim the second.

Claims for the first three months commenced on 13 May 2020, with the first payments arriving from 25 May 2020 and within 6 working days of claims being made.

The deadline for claiming under the first round is 13 July 2020. Claims for the second round of grants at the lower rate may be made in August with a deadline of 19 October 2020.  See How to claim under the SEISS below. 

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

If you fail to qualify for the SEISS, it may be possible to apply for funding via the coronavirus Discretionary Grant Fund. This is administered by Local Authorities and currently is only open for applications between 29 May and 9am 15 June 2020.

 

Overview

Eligibility

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

  • Government orders have meant that your trade or industry had to close or to be restricted in such a way that your trade closed or is otherwise adversely affected.
  • You cannot organise your work or workplace to allow your staff to work safely.
  • You cannot serve customers due to social distancing.
  • Restrictions have affected your customers or staff.
  • Your supply chain is interrupted due to shortages of product, PPE etc.
  • One or more of your contracts have been cancelled.
  • You have fewer or no customers or clients.

Restrictions on you personally:

  • You have been ill or self isolating or shielding.
  • You have had to care for others and this disrupted your work.

HMRC provides examples of situations were a business affected here.

Qualifying conditions

The same conditions apply to both rounds of grant funding. These conditions relate to eligibilty 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:

  • Have submitted your Income Tax Self Assessment tax return for the tax year 2018-19 on or by 23 April 2020.
  • Have traded in the tax year 2019-20.
  • Are trading when you apply or would be except for COVID-19.
  • Intend to continue to trade in the tax year 2020-21.
  • Have lost trading/partnership trading profits due to COVID-19. You should keep records to support this.
  • Average self-employed trading profits between £0 - £50,000.

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 birth of the child or within 12 months of an adoption placement:

  • If your trading profits dipped in 2018-19 due to parenting, you will now be able to use either their 2017-18 or both their 2016-17 and 2017-18 self-assessment returns as the basis for their eligibility for the SEISS.

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:

  • Must self certify that their UK trading profits are at least equal to their other worldwide income.

Scottish taxpayers: newly self-employed

Quick checker

New parents - added 26/6

  • Self-employed parents whose trading profits dipped in 2018/19 because they took time out to have children will be able to claim the SEISS. 
  • Parents, including adoptive ones, who took time out of trading to care for their children within the first 12 months of birth of the child or within 12 months of an adoption placement, will now be able to use either their 2017-18 or both their 2016-17 and 2017-18 self-assessment returns as the basis for their eligibility for the SEISS.
  • They will also need to meet the other standard eligibility criteria for support under the SEISS.
  • Further details of the change for self-employed parents will be set out by the start of July in published guidance. This measure was announced on 17 June according to the treasury website.

FAQs

Who is self-employed?

  • Anyone running their own business as a sole trader or partner and who reports their taxable profits or losses on the Self-Employment or Partnership pages of their Self Assessment tax return.
  • Those who run property based businesses and report their profits in the Land & Property pages of their return are not eligible for the SEISS.

What is trading income?

  • Trading income is your trading income less allowable expenses, less capital allowances and current year losses. 
  • Carried forward losses from another year are not deducted.

A 'trade' includes a trade, profession or vocation chargeable to income tax.

What is total income?

Total income means the total of:

  • income from employments
  • trading profits
  • property income
  • dividends
  • savings income
  • pension income
  • miscellaneous income (including social security income).

Farmers, market gardeners and authors: averaging

  • Where an averaging claim has been made, the figures should be adjusted to exclude the averaging adjustment, this applies for both trading income and total income.

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:

  • Is £30,000 - which is less than £50,000.
  • Is more than half of your total income of £45,000.

Making a claim

1. Use our SEISS Eligibility Check Tool to check that if you meet all the different qualifying conditions

2. HMRC's online eligibility checker checks what has been reported under self assessment.

  • Agents can use the online checker which will indicate from what date a claim may be made if the outcome is positive.
  • The checker requires the taxpayer UTR and NI number to verify if an individual is eligible for the grant.
  • If the result of the online checker is negative there is an option to ask HMRC to review eligibility.

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

  • Claims cannot be made by taxpayers' agents and must be made by the individual businesses themselves. If the taxpayer's agent attempts to make a claim on their behalf this will delay the claim as it will trigger a fraud alert. However request for a review as to eligiblity or the amount of the claim may be made by the agent.

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

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

How is the grant being calculated?

The amount of the 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:
  • Allowable expenses including flat rate deductions.
  • Capital allowances.
  • Business expenses deducted through the trading allowance.
  • Qualifying care relief.
  • Current year losses
  • No losses brought forward or personal allowances will be deducted.

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:

  • £60,000 profit in the tax year 2016 to 2017.
  • £60,000 profit in the tax year 2017 to 2018.
  • £30,000 loss in the tax year 2018 to 2019.

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 tax year 2016 to 2017 but made:

  • £25,000 of profit in the tax year 2017 to 2018.
  • £45,000 of profit in the tax year 2018 to 2019.

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:

  • If you can claim the grant.
  • How much grant you will receive.

I think I have been paid too much, what should I do? UPDATED 1 JULY 2020

You must tell HMRC if you think your grant has been overpaid as if you do not you may be charged a penalty. The HMRC guidance will shortly be updated with how to do this.

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

  • Use their information and inspection powers to check a claim has not been overpaid.
  • Raise Income Tax assessments to recover amounts from the recipient of a payment which they are not entitled to. The usual time limits will apply to these assessments. See Time limits for tax assessments, claims and refunds
  • Charge a penalty where a person deliberately makes an incorrect claim for SEISS and they fail to notify HMRC about the situation within 90 days. Originally a 30 day notification requirement was suggested here.
    • Penalties will fall under the failure to notify rules and, as these will be treated as deliberate and concealed actions, the penalties could be anything between 30% and 100% of the overclaimed amounts.

The draft 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.

  • In this situation the payment becomes taxable at the time that the recipient ceased to be entitled to it, and not when it was received.

Members of partnerships

  • Each partner in a partnership must make a claim based on their own circumstances.
  • HMRC will work out eligibility based on your share of the partnership’s trading profits.
  • If the partnership agreement requires the grant to be paid into the partnership pot, the partnership should give it back to you.

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:

  • The grants are to be included in taxable profits for the 2020/21 tax year only, and not for 2019/20.
  • The grants are classed as self-employed income for the purposes of universal credit claims.
  • Where a grant payment is received for more than one self-employment business it must be apportioned between them on a just and reasonable basis. 
  • Where the business has ceased, the grants are to be taxed as post-cessation receipts.

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 meaning:

  • The grants would be outside the scope of VAT and no output VAT should have to be accounted for.
  • The grant income should be disregarded for VAT registration and deregistration limits.

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.

  • You must be registered as self-employed and have filed a 2019 tax return.
  • For those who missed the 31 January 2020 return deadline, there was an extension to 23 April 2020 in which to file one.
  • Any amendments made to 2019 tax returns after 6pm on 26 March 2020 will not be taken into account.
  • The scheme commenced paying out for the first three months from 26 May 2020. For the second period claims and payments will be made in August. The grant will be paid directly into your bank account, in one instalment.

The Coronavirus Job Retention scheme for employees applies to furloughed workers laid off during the crisis and has a cap of £2,500 per month to the end of August reducing to £2,187.50 for September. 

 Check eligibility

Confused by the rules?

Try our Coronavirus Self-employment Income Support Scheme Tool

This will take you through the basics.

FAQs: HMRC guidance

HMRC published 'How different circumstances affect the Self-Employment Income Support Scheme'

This answers FAQs covering the following topics

HMRC's online checker became available on 4 May 2020. 

Additional support for small business

  • Employee job retention scheme: if you have other employees.
  • Grant funding: If you have business premises.
  • Small business rate relief: If you have business premises.
  • VAT payment deferral.
  • Emergency bank loans.

See our COVID-19: Financial support Tracker for links.

Links to our guides

COVID-19: Government support tracker

Coronavirus Self-employment Income Support Scheme Tool

External links

HMRC online eligibility checker

Guidance: Check if you can claim a grant through the coronavirus (COVID-19) Self-employment Income Support Scheme

Claim a grant through the Self-Employment Income Support Scheme

How HMRC works out total income and trading profits for the Self-employment Income Support Scheme

Chancellor extends Self-Employment Support Scheme

Chancellor's statement 26 March 2020

Coronavirus Bill 23 March 2020     

On 1 May 2020 HM Treasury published The Coronavirus Act 2020 Functions of Her Majesty’s Revenue and Customs (Self-Employment Income Support Scheme) Direction this confirms the detail of the scheme. 

On 1 July 2020 HM treasury published The Coronavirus Act 2020 Functions of Her Majesty’s Revenue and Customs (Self-Employment Income Support Scheme Extension) Direction confirming details of the extension of the scheme

House of Commons Briefing paper 23 June 2020: Coronavirus: Self Employment Income Support Scheme 

Finance Bill 2020 schedule 1 clause 19

Comments (153)

Rated 3.5 out of 5 based on 1 voters
This comment was minimized by the moderator on the site

I have the same issue as mentioned in other comments. There was a mistake in my 18/19 tax return and now it has been submitted too late! Any advice please?
What is not discussed, I feel, is how SEISS is here to help, not trying to catch someone...

I have the same issue as mentioned in other comments. There was a mistake in my 18/19 tax return and now it has been submitted too late! Any advice please?
What is not discussed, I feel, is how SEISS is here to help, not trying to catch someone out, not making things hard for people if they might, or might not, have made a mistake. Not refuse people on an obvious technicality. If there is a scheme to help people, then help.

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I am self employed worker HMRC said my average monthly earnings was £2850 approx so 80% approx £2200 but only received 1 payment surely it should have been 3???

Guest
This comment was minimized by the moderator on the site

I have been refused the grant as I “haven’t submitted my 2018/19 tax return” I checked online that I was up to date on my returns when they first made the announcement and it clearly said I had no outstanding forms/returns. It turns out I wasn’t...

I have been refused the grant as I “haven’t submitted my 2018/19 tax return” I checked online that I was up to date on my returns when they first made the announcement and it clearly said I had no outstanding forms/returns. It turns out I wasn’t issued a tax return to complete despite being self employed for 10+ years! No one knows why they just suggested I asked for a review explaining. I did this and got another letter saying I’m not eligible! This is their mistake not mine, why should I have to suffer the consequences? Is there anything I can do? Please help.

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Should I claim the grants if I have still been able to work, but my income has dropped, for example I am now having to work 6 days to earn the same amount that would take me 5 days to earn before coronavirus

Guest
This comment was minimized by the moderator on the site

Please confirm. We got paid months but the period for claiming March until July is actually 4 months. You've missed a whole month of earnings.

Guest
This comment was minimized by the moderator on the site

Can someone help please. I submitted my tax return for 18/19 on the 4 April 2020 but HMRC keep refusing me and saying the deadline was 23 April 2020 so you dont qualify. I clearly submitted it before 23 April 2020 and they admit i submitted it 4...

Can someone help please. I submitted my tax return for 18/19 on the 4 April 2020 but HMRC keep refusing me and saying the deadline was 23 April 2020 so you dont qualify. I clearly submitted it before 23 April 2020 and they admit i submitted it 4 April 2020 but they said this is late for the grant.

I dont know what to do and why they are refusing.

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I have a client that came up with an "ineligible" claim.
We put in a review, which has come back very quickly (within 2 days) - which confirms "ineligible".

My Client was employed for the majority of 2016/17, & rental income.
He went self...

I have a client that came up with an "ineligible" claim.
We put in a review, which has come back very quickly (within 2 days) - which confirms "ineligible".

My Client was employed for the majority of 2016/17, & rental income.
He went self employed after Christmas 2016, and still receives rental income & a small part time salary as well.
In 2018/19 the trading profits were in excess of 50% of his income for that year (therefore satisfies Condition A)
The overall of the 3 years his profits were below 50% of his total income (therefore failing Condition B)
Surely as he satisfies Condition A in 2018/19 he is eligible ? (or is Condition A only applicable if he started trading in 2018/19, and had no trading profit in 2016/17, and 2017/18)

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There are two different strands to SEISS, and it may be that one is not met.
First off is to check that you are able to apply by reference to trading dates, filings, and profit limits and proportions - see our SEISS eligibility tool. https://www....

There are two different strands to SEISS, and it may be that one is not met.
First off is to check that you are able to apply by reference to trading dates, filings, and profit limits and proportions - see our SEISS eligibility tool. https://www.rossmartin.co.uk/covid-19/4673-coronavirus-self-employment-income-support-tool
Secondly, to work out what is payable, you need to meet one of the conditions, A to C - see above.
We have seen cases where you are eligible under the first strand and not under the second, and so it may be a case like that.

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I have used the checker on this site, and it appears my client is eligible. HMRC have assessed he isn't eligible as they are only looking at the 3 years combined average of total income, where his non self employed income is higher due to a large...

I have used the checker on this site, and it appears my client is eligible. HMRC have assessed he isn't eligible as they are only looking at the 3 years combined average of total income, where his non self employed income is higher due to a large employment income in 2016/17 (he went majority self employed in Jan 17 after finishing his job, but low profits in 16/17 & 17/18).
They have not taken into account option A (his self employment in 2018/19 is higher than his employment & rental income).
We appealed but have heard nothing - will it be too late to claim after Monday 13/7/20 ? or will there be an extension if they rule he is eligible.

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My partner's accountant submitted the 2018/19 tax return a few days after the 23rd April. What can he do?

Guest
This comment was minimized by the moderator on the site

I'm afraid he has missed the deadline for the scheme and will have to look at other government support measures such as universal credit.

Guest
This comment was minimized by the moderator on the site

What happens if as a self employed private hire driver working for myself, I change now to self employed courier working for a company but I've already had the first seiss grant for my private hire business being hit hard by the lock down. Do I...

What happens if as a self employed private hire driver working for myself, I change now to self employed courier working for a company but I've already had the first seiss grant for my private hire business being hit hard by the lock down. Do I owe anything back for the first grant period?

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The grant is payable if you are self employed and your business is adversely affected by the virus and you need financial support as a result. There is no restriction as to whether you work or not.

Guest
This comment was minimized by the moderator on the site

I qualified for payment based on relevant the 3 tax years, but in 19/20 tax year, due to various family circumstances, ended up with earnings well below the pension income I receive. Now, having seen and read more of the detail, I wonder if...

I qualified for payment based on relevant the 3 tax years, but in 19/20 tax year, due to various family circumstances, ended up with earnings well below the pension income I receive. Now, having seen and read more of the detail, I wonder if should have claimed at all.

Your advice would be a great help - much easier than getting in touch with HMRC at the moment it seems!

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The conditions for the scheme do not consider 2019/20 in any of the tests and there is nothing in the guidance to date to suggest that there will be any retrospective adjustments once 2019/20 tax returns are filed. As long as you answered the...

The conditions for the scheme do not consider 2019/20 in any of the tests and there is nothing in the guidance to date to suggest that there will be any retrospective adjustments once 2019/20 tax returns are filed. As long as you answered the questions in the claim correctly and honestly then HMRC have had all the information they require to assess your claim and would have refused it if you were ineligible.

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