Self-Employment Income Support Scheme

19 Oct 2021

The Self Employment Income Support Scheme (SEISS) has closed. The last date for making a claim was 30 September 2021.

On this page we provide an overview of each of the five SEISS grants with links to HMRC’s guidance and factsheets, and the legislation underpinning the scheme.  We also provide a Q&A on various compliance and eligibility aspects of the scheme.

First grant

On 26 March 2020, the Chancellor announced that the Government would provide support to self-employed workers in the form of a cash grant of 80% of their profits, up to £2,500 per month for three months. This was to be known as the Coronavirus (COVID-19) Self-employment Income Support Scheme (SEISS). Applications for the first grant closed on 13 July 2020.

Second grant

On 29 May 2020, the Chancellor announced that the SEISS would be extended with those eligible able to claim a second grant from 17 August 2020. The grant was worth 70% of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total. Applications for the second grant closed on 19 October 2020.

Third grant

The third grant covered a three-month period from 1 November 2020 until 29 January 2021. It was worth 80% of average monthly trading profits paid out in a single instalment covering three months’ worth of profits and capped at £7,500 in total. Applications for the third grant closed on 29 January 2021.

Fourth grant

The fourth grant covered the three-month period from February to April 2021. Details were announced by the Chancellor at the Budget on 3 March 2021 – see here. It was worth 80% of three months’ average trading profits, paid out in a single instalment, capped at £7,500.

Unlike the first three grants, the fourth grant took into account 2019/20 tax returns and was open to those who became self-employed in tax year 2019/20. Eligibility was based on 2019/20, or the four year period spanning 2016/17 to 2019/20. You must have submitted your 2019/20 return to HMRC by 2 March 2021 to be eligible.

The value of the grant was based on an average of trading profits for up to four tax years ending 2019/20. Applications for the fourth grant closed on 31 May 2021.

Fifth and final grant

The fifth and final grant covered the impact of coronavirus from May to September 2021. Like the fourth grant it took into account 2019/20 tax returns and was open to those who became self-employed in tax year 2019/20. Eligibility was based on 2019/20, or the four year period spanning 2016/17 to 2019/20. You must have submitted your 2019/20 return to HMRC by 2 March 2021 to be eligible for it.

For the fifth grant a new additional turnover test was introduced. If you were eligible for the fifth grant, the amount of the grant was determined by how much turnover had been reduced in the year April 2020 to April 2021.

The grant was worth 80% of three months’ average trading profits, capped at £7,500, for those with a higher reduction in turnover (30% or more). For those with a lower reduction in turnover, of less than 30%, then the grant was worth 30% of three months average trading profits, capped at £2,850.

Applications for the fifth grant closed on 30 September 2021.

HMRC guidance

Some of HMRC’s guidance was withdrawn on 1 October 2021 after applications for the fifth grant closed, but it will remain available to view on GOV.UK for the foreseeable future. The withdraw guidance still on GOV.UK is as follows:

  • Guidance on how to use the scheme, including who could claim and the amount of grant payable, is here.
  • Guidance on how to claim a grant is here.
  • Guidance on how to work out your total income and taxable profits for the scheme is here.
  • For how your trading conditions affect your eligibility for the scheme, and what is meant by reduced demand or temporary closure and some examples of how this could affect your eligibility – see here.
  • Guidance on how to work out your turnover so you can claim the fifth SEISS grant – see here.
  • Guidance on different circumstances, such as for late returns, partners in a partnership, those who have loans covered by the loan charge, those on parental leave, military reservists, non-residents, those claiming averaging relief and those near or above the state aid limits, is here.

Withdrawn guidance for the first four grants is available to read on the National Archives website, see here.

Current guidance on GOV.UK is as follows:

  • Guidance on how to check if you need to change your 2020/2021 Self Assessment tax return for SEISS payments, and how to do it – see here.
  • Guidance on how to tell HMRC if you made a claim in error because you were not eligible for the grant, have been overpaid or would like to make a voluntary repayment is here.

Factsheets

HMRC’s factsheet CC/FS47 gives more information about assessments and penalties in relation to grant overpayments.

HMRC’s factsheet CC/FS11a provides information about when HMRC might charge penalties for a failure to notify an Income Tax charge relating to an overpayment of a coronavirus support payment, including under the SEISS.

Legislation

HMRC has published 7 Treasury Directions under Sections 71 & 76 of the Coronavirus Act 2020 which set out the legal framework for the SEISS here.

Legislation to introduce rules on how SEISS grants are taxed is in Schedule 16 Finance Act 2020 – see here – as amended by section 32 Finance Act 2021 – see here. The legislation also gives HMRC powers to recover payments to which recipients were not entitled to, and to charge a penalty in cases of deliberate non-compliance.

Further information

An explainer about the scheme can be found on the CIOT’s Low Incomes Tax Reform Group’s website and also on the ATT website.

QueryResponse
Who is eligible and who isn’t
What is the position for property lettings businesses, including furnished holiday lettings? Do they qualify for the SEISS?No, the SEISS scheme only applies to individuals who complete the self-employment or partnership trading pages of the self-assessment tax return. These pages exclude income from property, which includes furnished holiday lettings.
Do people working in the construction industry qualify for the SEISS?Yes, if they are self-employed and meet the eligibility criteria. They must have completed the self-employment pages of the self-assessment tax return.
Does one look at the trading profits and total income at partner level or at partnership level when working out whether a partner in a partnership is eligible to claim a SEISS grant?HMRC’s guidance says that a member of a partnership can make a claim for the SEISS grant and that eligibility is based on the partner’s share of the partnership’s trading profits. See example here.
Are all trading partnerships included even those with a corporate partner?Yes, but only to the extent that they have partners who are individuals. The partners that are incorporated are not covered by the SEISS.
I’m resident and domiciled outside the UK. Can I claim under the SEISS?Yes, you may be eligible, although you need to compare your trading profits with your worldwide income - see HMRC’s guidance here.
Can trusts claim the SEISS?No, you cannot claim the grant if operating a trade through a trust – see here.
Can you claim the SEISS grant and continue to work?Yes, you can receive the grant and continue to work in your self-employed business, start a new trade and also take on other employment including voluntary work or duties as an armed forces reservist.
If an individual has remained self-employed throughout the relevant tax years but has changed what they do, for example, running a café, then closing it down and becoming a window cleaner, does this matter?No, so long as you were self-employed in 2018/19 (for the first three grants) and 2019/20 (for the fourth and fifth grants) and the other eligibility criteria are met.
Are the self-employed who started trading during 2019/20 eligible for the SEISS?

If you were not self-employed in the 2018/19 tax year and so did not submit a 2018/19 tax return showing any self-employed income then you were not eligible for the first three SEISS grants. You may qualify for other government support.

If you started trading during 2019/20 you may be eligible for the fourth and fifth grants.

I didn’t submit my 2019/20 tax return by midnight on 2 March 2021. Can I still claim the fourth and fifth grants?No, if you didn’t submit your 2019/20 tax return by midnight on 2 March 2021 you will not be able to claim the fourth or fifth grants.
Can dentists claim under the SEISS for their private (non-NHS) work?HMRC have confirmed that overall as long as they meet the criteria for the SEISS, dentists can claim on the basis that they have income from non-NHS work. For further information see here.
Trading profits and losses
How does it work when a taxpayer has made a loss in one of the tax years on which the grant will be based?In-year trading losses are taken into account as well as profits in calculating a person’s eligibility for the grant and the amount of the grant they will receive. However, non-trading losses are not included in the calculation of non-trading income. See here.
What if an individual is self-employed with more than one trade at the same time? Do you combine them?Yes, if a person has more than one trade in the same tax year, HMRC will add together all the profits and losses for all the trades to work out the trading profit. See here.
Are ‘trading profits’ pre or post farmers’ and creative industries averaging relief?HMRC will use the profit before farmers’ (and creative industries’) averaging relief to work out whether a person is eligible to claim the grant and how much grant they will receive. See here.
If I started being self-employed during the 2018/19 tax year (or 2019/20 for the fourth and fifth grants), will my trading income and profits be extrapolated to be expressed as an annual rate when looking at whether I am eligible to receive the grant?

No, if you started being self-employed during 2018/19, for example on 6 October 2018, HMRC will look at your actual trading income and profits for the 6 months of trading. They will not be extrapolated to be expressed as an annual amount. See here.

The same principle applies for the fourth and fifth grants if you started trading during the tax year 2019/20.

Compliance Aspects
Are the grants taxable?Yes, the grants are taxable. They are subject to both Income Tax and Class 4 National Insurance Contributions.
When are the grants taxable (in which tax year)?

The grants are taxable in the tax year they are received.

This means that the first three grants are taxable in the tax year 2020/21. They should be reported in full on your 2020/21 self-assessment tax return. Specific boxes are provided on the form for them. You must use the specific boxes provided.  Do not report your grant(s) in any other box(es). No part of the grants should be reported on your tax return for the tax year 2019/20.

The fourth and fifth grants are taxable in the tax year 2021/22 and should be reported on your 2021/22 self-assessment return in due course.

What should I do if I have not correctly reported the grant(s) I received (or not reported them at all) on my 2020/2021 self- assessment tax return?

HMRC will make an adjustment to your return if the amount of the grant(s) you reported does not match their records, you received a grant but have not reported it on your return or you did not submit a self-employment or partnership page with your return.

What you need to do depends on your circumstances – for further information about what you need to do see HMRC’s guidance here.

What if I disagree with how HMRC have worked out the amount of my payment?If you have an agent discuss it with them. If you still disagree with the amount, you can ask HMRC to review it – to contact HMRC by telephone or webchat see here.
Can agents request a review of the amount of the payment on behalf of their clients?Yes, agents can request a review of their client’s award amount by contacting HMRC by telephone or webchat – see here.
What should I do if I claimed the grant but I wasn’t actually eligible for it, or if I’ve received more from HMRC than I was entitled to?

You must tell HMRC if, when you made the claim you:

 - were not eligible for the grant

 - received more than HMRC said you were entitled to

When you must tell HMRC depends on the date you received your grant. If you received the grant:

- before 22 July 2020 you must tell HMRC on or before 20 October 2020

- on or after 22 July 2020 you must tell HMRC within 90 days of receiving the grant

If you do not you may have to pay a penalty. Further information about assessments and penalties is in HMRC’s Factsheet CC/FS47.

HMRC have provided an online form to notify and repay some or all of the grant.

When you’ve completed the form, you’ll be given bank details to pay back the grant. You should print or save this page so you can make the payment.

If you’re unable to use the online facility you should contact HMRC for help.

HMRC are contacting people who they think were not eligible to claim the SEISS because they told HMRC on their tax return that they stopped trading in either the tax year 2018/19 or 2019/20. If you receive an email or letter from HMRC asking you to review your grant application, you should follow the instructions in the email or letter and respond to HMRC by the deadline provided – for further information see here.

I have decided that I would like to voluntarily repay some or all of the grants I received even though I was eligible to receive it when I made my claim.

You can voluntarily pay back some or all of the grant you received. If you choose to do this, you can do so at any time – see here – using HMRC’s online form.

When you’ve completed the form, you’ll be given bank details to pay back the grant. You should print or save this page so you can make the payment.

If you’re unable to use the online facility you should contact HMRC for help.