What is the coronavirus SEISS grant – and how do I apply?

The Self-employment Income Support Scheme (SEISS) is a temporary scheme set up by the government to help self-employed people get through the coronavirus pandemic.

• How much do you get under the SEISS?
• What is SEISS eligibility?
• How do I apply for the SEISS?
• When will SEISS payments be paid?
• Can I keep working if I get SEISS?
• What if I don’t qualify for the Self-employment Income Support Scheme?

It was initially designed to cover three months, paying out one lump sum to those affected, but it was soon extended to provide further payments.

What is the Self-employment Income Support Scheme (SEISS)?

The government’s Self-employment Income Support Scheme (SEISS) is essentially the self-employed version of the furlough scheme.

While you still owe income tax and National Insurance on any money you get through the SEISS, it’s a grant rather than a loan. That means you don’t need to pay it back.

How much do you get under the SEISS?

The amount available under the SEISS has varied for each payment:

• the first SEISS grant covered 80 per cent of average monthly trading profits for three months, up to a maximum of £7,500 (applications closed 13 July 2020)
• the second grant covered 70 per cent of monthly trading profits for three months, up to a maximum of £6,570 (applications closed 19 October 2020)
• following winter restrictions and lockdowns, a third grant covered 80 per cent again, rather than a previously announced reduction (applications closed 29 January 2021)
• details of the fourth SEISS grant were announced in the UK Spring Budget – it covers 80 per cent for February to April 2021, with applications closing on 1 June 2021
• a fifth and final grant covers May to September – it covers 80 per cent of average profits if your turnover has fallen by more than 30 per cent (those who haven’t been as affected can get a 30 per cent grant, capped at £2,850)

SEISS grant 5 – when is the next self-employed grant?

Applications for the fifth SEISS grant open in July 2021 and close on 30 September. As most remaining restrictions ease, the fifth grant will be the final one.

It covers five months from May to September, but it will still only provide three months of average trading profits.

As long as you filed your 2019-2020 tax return by 2 March 2021, you should be able to apply.

For the fifth SEISS grant, there’s a new test that determines how much your turnover has fallen. That’s because if your turnover has fallen by more than 30 per cent, you get 80 per cent of average profits (capped at £7,500). You get 30 per cent of profits if it’s fallen by less than 30 per cent (capped at £2,850).

With this in mind, you need to get two figures ready for HMRC before you apply – your turnover for the pandemic period and your turnover for a reference period.

Pandemic period – this is a 12-month period starting on any date between 1 and 6 April 2020. The calculation can be the same figure that’ll be on your 2020-21 tax return (you don’t need to submit it before you apply, but HMRC will check that the two match). The figure is for all of your business, but it should exclude any other support payments you’ve received (like previous SEISS grants).

Reference period – this is your turnover figure for the 2019-20 tax year, but HMRC says you can use 2018-19 if 2019-20 wasn’t a normal year for your business.

HMRC won’t ask for your turnover figures if you started trading in 2019-20 and didn’t trade in 2018-19, 2017-18, and 2016-17.

The online service will compare the two figures and tell you which amount you’ll get.

Read more about working out your turnover for HMRC at gov.uk.

How do I work out my trading profits for SEISS?

HMRC previously worked out your average trading profit by taking your total trading profits or losses for tax years 2016-17 + 2017-18 + 2018-19 and dividing by three.

For the fourth and fifth grants, HMRC also takes your 2019-2020 records into account.

As an example, if your average trading profit over the four tax years is £45,000, you can then divide that by 12 to work out how much SEISS will cover you for three months. Here’s an example at the 80 per cent level for the fifth grant:

• £45,000 divided by 12 is £3,750
• £3,750 multiplied by three is £11,250
• 80 per cent of £11,250 is £9,000 – you receive the £7,500 cap

If you’re a sole trader, HMRC will work out your trading profit after allowable business expenses. They’ll do this by adding any losses brought forward from previous tax years to the amount shown on your tax return as ‘total taxable profits from this business’.

If you’re a member of a partnership, HMRC will work out your share of the partnership’s profit after adjustments. They’ll do this by adding any losses brought forward from previous years to the amount shown as ‘your share of the total taxable profits from the partnership’s business’.

What is SEISS eligibility?

For the fifth grant, you need to be either currently trading but suffering reduced demand because of coronavirus, or temporarily unable to trade because of coronavirus.

Other SEISS eligibility means that you need to:

• have traded in tax years 2019-20 and 2020-21 (and submitted your 2019-2020 return by 2 March 2021)
• declare that you intend to continue to trade in 2021 and 2022 and that you ‘reasonably believe’ there’ll be a significant reduction in your trading profits from 1 May to 30 September 2021
• take in trading profits of no more than £50,000 and at least equal to your non-trading income

If you’re not eligible based on your 2019-20 return, HMRC will then look at the tax years 2016-17, 2017-18, 2018-19, and 2019-20.

What does a ‘reasonable belief’ that you’ll face reduced profits mean?

You need to have a ‘reasonable belief’ that you’ll suffer reduced profits because of coronavirus – and you have to keep records to support the claim.

Gov.uk gives the example of a personal trainer whose gym has closed because of lockdown. As she can’t work in the gym, she’ll have a reasonable belief that her profits will reduce.

There are more examples on the government website, including what counts as not having a reasonable belief.

How do I apply for the SEISS?

The deadline for claiming the fifth SEISS grant is 30 September 2021. The claims portal for the fifth grant opens in July 2021.

Gov.uk says that HMRC should contact you in July if you’re eligible, to give you a date you can make your claim from.

When you do apply, it’ll be useful to have the following information to hand:

• Self Assessment UTR
• National Insurance number
• Government Gateway user ID and password
• bank account number and sort code (which must accept BACS payments)
• your pandemic and reference turnover figures (outlined above)

You can check gov.uk’s SEISS guidance for more details.

When will SEISS payments be paid?

You’ll find out whether you’ll get the grant as soon as you’ve made your SEISS claim. If they approve your claim, the money should come through within six working days.

Make sure you keep a copy of all records associated with your claim, the same as you would for all your other self-employed records. You should keep a record of:

• the amount you claimed
• your claim reference number
• evidence that your business has been adversely affected by coronavirus

This is so you can report your grant:

• on your Self Assessment tax return
• as self-employed income if you claim Universal Credit
• as self-employed income if you claim tax credits

Can I keep working if I get SEISS?

Unlike furloughed employees under the CJRS, the SEISS allows self-employed people to continue working. You’re also free to start a new trade, employment, volunteering, or be an armed forces reservist.

What if I don’t qualify for the Self-employment Income Support Scheme?

You can read about other financial help you may be eligible for in our article on coronavirus support for small business and the self-employed. We’ve also got a guide to small business grants if you’re looking specifically for funding you don’t have to pay back.

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