Self-Employment Income Support Scheme

Support provided by HMRC

What does this involve?

Fourth grant instalment

If you're a self-employed individual or a member of a partnership and have been affected by the coronavirus (COVID-19) crisis, you can apply for a taxable grant through the Self-Employment Income Support Scheme (SEISS).

This grant is equal to 80% of 3 months’ average trading profits. It will be paid out in a single instalment and capped at £7,500 in total.

The fourth instalment of this grant covers the 3-month period from 1 February 2021 to 30 April 2021. 

 

Fifth grant instalment

The UK government has also announced that there will be a fifth and final SEISS grant covering May to September 2021.

You will be able to claim from late July if you are eligible for the fifth grant.

The amount of the fifth grant will be determined by how much your turnover has been reduced in the year April 2020 to April 2021.

The fifth grant will be worth:

  • 80% of 3 months’ average trading profits, capped at £7,500, for those with a turnover reduced by 30% or more
  • 30% of 3 months’ average trading profits, capped at £2,850, for those with a turnover reduced by less than 30%

Further details will be provided on the fifth grant in due course.

Am I eligible?

To be eligible for the fourth grant, you must be a self-employed individual or a member of a partnership.

To work out your eligibility, HMRC will first look at your 2019 to 2020 Self Assessment tax return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income (any income from sources other than your trade).

If you’re not eligible based on your 2019 to 2020 Self Assessment tax return, HMRC will then look at the tax years 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020.

You must also have traded in both the tax years:

  • 2019 to 2020 and submitted your tax return by 2 March 2021
  • 2020 to 2021

You must either:

  • be currently trading but are impacted by reduced demand due to coronavirus
  • have been trading but are temporarily unable to do so due to coronavirus

You must also declare that:

  • you intend to continue to trade
  • you reasonably believe there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus

For example, your trade could be adversely affected if:

  • you’re unable to work because you:
    • are shielding
    • are self-isolating
    • are on sick leave because of coronavirus
    • have caring responsibilities because of coronavirus
  • you’ve had to scale down or temporarily stop trading because:
    • your supply chain has been interrupted
    • you have fewer or no customers or clients
    • your staff are unable to come in to work

There are some circumstances that can affect your eligibility, such as if:

  • your return is late, amended or under enquiry
  • you’re a member of a partnership
  • you had a new child
  • you have loans covered by the loan charge provisions
  • you claim averaging relief
  • you’re a military reservist
  • you’re non-resident or chose the remittance basis

If you claim Maternity Allowance this will not affect your eligibility for the grant.

Find out more about how your circumstances affect your eligibility on the UK Government website.

What does this cost?

It is free to apply for a grant under the scheme.

The grant is subject to Income Tax and self-employed National Insurance Contributions. It must be reported on your 2021 to 2022 Self Assessment tax return.

The grant also counts towards your annual allowance for pension contributions.

Who is this for?

Self-employed individuals or members of a partnership who have been adversely affected by the coronavirus pandemic.

How long does this take?

Once you’ve submitted your claim, you will be told straight away if your grant has been approved.

The grant will be paid directly into your bank account within 6 working days.

Important information

If you receive a grant you can continue to work, start a new trade or take on other employment, including voluntary work or duties as an armed forces reservist.

Your tax agent or adviser cannot make the claim for you. You must make the claim yourself. If you use an agent you should contact them if you need any help or support.

 

Next steps

The online claims service for the fourth grant is now live. It will be available until 31 May 2021.

If you are eligible, HMRC will contact you in mid-April to give you your personal claim date. This will be the date that you can make your claim from. It will be given to you either by email, letter or within the online service.

Visit the UK Government website for more information.

Support provided by HMRC

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