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

Definition of Self-Employment Income Support Scheme

The Self-Employment Income Support Scheme is a temporary initiative that aims to provide financial support to self-employed people whose businesses are affected by the coronavirus (Covid-19) pandemic.

How the scheme works

The Self-Employment Income Support Scheme (SEISS) was announced in March 2020 by Chancellor Rishi Sunak. It was initially extended on 24th September 2020 and then extended again on 5th November 2020 and 3rd March 2021. Only sole traders and partners are eligible for the scheme.

The SEISS initially enabled businesses that were affected by the coronavirus crisis between March and October 2020 to claim two taxable grants. Extensions to the scheme have now made three additional taxable grant payments available for businesses affected by the coronavirus crisis between November 2020 and September 2021. The application window for the fourth grant closed on 31st May 2021 but qualifying business owners who filed their 2019/20 Self Assessment tax return by midnight on 2nd March 2021 will be able to claim for the fifth SEISS grant.

The fifth grant will cover 1st May to 30th September 2021. Business owners whose turnover fell by 30% or more between April 2020 and April 2021 will receive 80% of three months’ worth of their usual average trading profits, capped at £7,500 in total. Business owners whose turnover fell by less than 30% during the same period will receive 30% of three months’ worth of their usual average trading profits, capped at £2,850 in total.

A summary of the five grants offered through the Self-Employment Income Support Scheme can be found in the table below:

SEISS grant For businesses affected by Covid-19 during: Grant application window % of trading profits covered Maximum grant available
Grant 1 1st March - 13th July 2020 13th May - 13th July 2020 80% £7,500
Grant 2 14th July - 19th October 2020 17th August - 19th October 2020 70% £6,570
Grant 3 1st November 2020 - 29th January 2021 30th November 2020 - 29th January 2021 80% £7,500
Grant 4 1st February - 30th April 2021 Late April - 1st June 2021 80% £7,500
Grant 5 1st May - 30th September 2021 Opens late July 2021 30% or 80% £2,850 or £7,500

How to apply for the fifth SEISS grant

Self-employed business owners who meet HMRC's qualification criteria can apply for the fifth grant from late July 2021.

In order to be eligible, you must be either a sole trader or a partner in a partnership. In addition, you must have traded during both the 2019/20 and 2020/21 tax years and have:

  • submitted your 2019/20 tax return on or before 2nd March 2021
  • trading profits of no more than £50,000
  • trading profits at least equal to your non-trading income

Non-trading income is any income that you made outside of your business, such as from a part-time job or a pension.

You don’t need to have submitted your 2020/21 tax return to claim the fifth grant.

In order to apply for the fifth grant, you must declare that you intend to continue to trade and have a 'reasonable belief' that there will be a 'significant reduction' in your trading profits between 1st May and 30th September 2021.

For the fifth grant, HMRC will work out your grant amount based on your business turnover from previous years.

In order to make a claim, you’ll need to have two different figures:

  • your turnover for a 12-month period starting between 1st April 2020 and 6th April 2020
  • your turnover for either the 2019/20 or 2018/19 tax years

HMRC will compare these figures to work out how much you’ll receive from the fifth grant. You do not need to supply turnover figures if you started trading during the 2019/20 tax year and did not trade between 2016 and 2019. HMRC provides more information about preparing to claim on its website.

You can find out more about the support available for small businesses during the coronavirus pandemic on our small business coronavirus support hub.

Disclaimer: The content included in this glossary is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this glossary. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.

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