Self-Employment Income Support Scheme (SEISS) Grant Extension

Following the Chancellor’s announcement, as part of the Winter Economy Plan the SEISS continues to be a key part of the financial support that the Government, via HMRC, is providing to many self-employed people to help get through the economic downturn caused by COVID-19 and the lockdown.

Are you eligible?

To be eligible for the scheme you must meet the following criteria:

  • Currently be eligible for the SEISS (although you do not need to have claimed the previous grants – this is explained below)
  • Declare that you are currently actively trading and intend to continue to trade
  • Declare that you are currently impacted by reduced demand caused by COVID-19 in the period of 1 November to the date of your claim

You are currently eligible for SEISS if you meet the following conditions. The first condition is that your self-employment income is less than £50,000 and the self-employment income must be more than half of your total income. This is met in one of the two following ways:

  • Your self-employment income for 2018/19 is less than £50,000 and the self-employment income is more than half of total income for 2018/19.
  • Your average self-employment income for 2016/17, 2017/18 and 2018/19 is less than £50,000 and that average is more than half of the average of your total income for the same three years.

The other conditions are that you:

  • Have submitted your Income Tax Self-Assessment tax return for the tax year 2018-19
  • 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-1

How does the grant extension work?

The extension will provide two grants for the six month period from November 2020 to April 2021. The grants will be paid in two lump sums, the first for the period from the start of November until the end of January, the second for the period from the start of February to the end of April. The second grant may be adjusted to respond to changing circumstances.

This grant is subject to Tax and National Insurance Contributions and will amount to 20% of your average monthly qualifying trading profits capped at £1,875 per month. This has dropped from the previous 70% with a cap of £2,190.

Making a claim

The government will release full details about when and how you can make a claim soon although we expect you will have to apply online via the government website.

Contact us

If you have queries regarding the SEISS please contact our tax team if you require advice on this issues.

A version of this blog originally appeared on the website of MHA member firm, MHA Tait Walker.