The Self-Employment Income Support Scheme (SEISS) was introduced by the UK government in response to the economic impact of the COVID-19 pandemic. It aims to provide financial support to self-employed individuals who have been adversely affected by the pandemic. In this article, we will explore the details of the scheme, its eligibility criteria, and how to apply for it.
Overview of the SEISS
The SEISS was initially introduced in May 2020 and has since been extended in various rounds. The latest round, SEISS 5, covers the period from May 2021 to September 2021. The scheme offers a taxable grant, which does not need to be repaid, to eligible self-employed individuals. The grant amount varies depending on the individual’s average trading profits and is paid in a single lump sum.
To be eligible for the SEISS, an individual must meet the following criteria:
- Be self-employed or a member of a partnership.
- Have traded in the tax years 2019-20 and 2020-21.
- Have submitted their tax return for 2020-21 by 31 January 2022.
- Have trading profits of no more than £50,000 per year.
- Derive at least 50% of their income from self-employment.
In addition to these criteria, an individual must also have been adversely affected by the pandemic. This could include having to stop trading due to government restrictions, having to reduce their trading activity, or experiencing a significant drop in demand for their services.
Calculating the grant amount
The grant amount is calculated based on an individual’s average trading profits over the last three tax years. For SEISS 5, this includes the tax years 2018-19, 2019-20, and 2020-21. The grant is calculated as 80% of three months’ average trading profits, up to a maximum of £7,500.
To calculate the average trading profits, HMRC will take the total trading profits for the three tax years and divide them by three. If an individual has not traded for all three years, HMRC will use the years for which trading profits are available to calculate the average.
How to apply
Applications for SEISS 5 opened on 29 July 2021 and closed on 30 September 2021. Individuals had to make the application themselves, as it could not be made on their behalf by an accountant or agent. To apply, an individual had to log in to their HMRC online account and follow the application process.
Before applying, individuals needed to make sure they had all the necessary information to hand. This includes their Unique Taxpayer Reference (UTR), National Insurance number, bank account details, and evidence of how the pandemic has adversely affected their business. HMRC may also ask for additional evidence, such as business accounts or tax returns, to support the application.
Once the application is submitted, HMRC will assess it and make a decision on whether the individual is eligible for the grant. If the application is successful, the grant will be paid in a single lump sum into the individual’s bank account within six working days.
The SEISS has provided vital financial support to self-employed individuals during the pandemic. It has helped to mitigate some of the economic impacts of government restrictions and reduced demand for services. While the scheme has been extended several times, the most recent round (SEISS 5) closed in September 2021. It is not yet clear whether there will be further rounds of the scheme, but the government has committed to supporting self-employed individuals through other measures, such as business grants and loans. If you are self-employed and have been adversely affected by the pandemic, it is important