UK Self-Employed Income Support Scheme

The UK Self-Employed Income Support Scheme

Guidance for members on the UK Government’s Self-Employed Income Support Scheme.

The UK Self-Employed Income Support Scheme

This page provides guidance for members on the UK Government’s Self-Employed Income Support Scheme (“SEISS”) which was announced by the Chancellor of the Exchequer on 26 March 2020. The content herein has been derived entirely from HMRC’s guidance and communications to Chartered Accountants Ireland on the SEISS.

Two further grants (the third and fourth) under the scheme were announced as part of the Chancellor’s Winter Economy plan.

The Institute will continue to engage with HMRC on our members behalf in respect of COVID-19 supports and will share the most up to date information as it becomes available.

We therefore recommend that you bookmark this page and also regularly check the latest updates section of our COVID-19 hub.

This page was last updated on Monday, 11 January 2021

The SEISS – extension

Although two further SEISS grants were announced in the September Winter Economy plan, the third self-employed income support scheme (“SEISS”) grant has been increased and is 80 per cent of three months’ average trading profits capped at £7,500 for the period November 2020-January 2021, according to the Government’s announcement.

The third and fourth grants will be paid in two lump sum instalments each covering three months. The fourth taxable grant will cover a three-month period from 1 February 2021 until 30 April 2021. The Government will review the level of the fourth grant and set this in due course.

For the third grant, the rules on who is eligible to claim have changed. However, applicants will still need to have submitted a self-assessment tax return for the tax year 2018/19 showing self-employment income (unless one of the existing exceptions applies).

To make a claim for the third grant, applicants must also meet a number of conditions, and make an honest assessment about whether they reasonably believe their trading profits will be significantly reduced due to coronavirus.  

As before, applicants must: 

  • be a self-employed individual or a member of a partnership. They cannot claim the grant if they trade through a limited company or a trust; and
  • have traded in both the tax years 2018/2019 and 2019/2020.

For the third SEISS grant applicants must also: 

  • either be currently trading but are impacted by reduced activity, capacity or demand, or have been previously trading but are temporarily unable to do so due to coronavirus;
  • declare that they intend to continue to trade, and that they reasonably believe that the impact on their business will cause a significant reduction in their trading profits;
  • ·only claim if the reduction in profits is caused by reduced business activity, capacity or demand, or inability to trade due to coronavirus – reduction in profits due to increased costs (such as having to buy masks) does not count for this purpose.  

When deciding whether the reduction is significant, applicants will need to consider their wider business circumstances. HMRC expects claimants to make an honest assessment about whether they reasonably believe their trading profits will be significantly reduced compared to what they would otherwise expect to achieve during this period. 

The business must have been impacted on or after 1 November 2020. Claimants must keep evidence to show the impact and reduction in their business activity across the qualifying period. 

Taxpayers do not have to consider any other coronavirus scheme support payments they have already received when deciding whether they reasonably believe that they will suffer a significant reduction in trading profits. This reduction needs to be due to reduced activity, capacity, demand or inability to trade due to COVID-19 during 1 November 2020 to 29 January 2021.   

HMRC is also contacting all self-employed people in the UK that may be eligible to let them know about the third grant.  

The SEISS – recent updates

Important updates and recent developments in the SEISS are as follows:-

  • The third grant covers the period November 2020 – January 2021 and is 80 per cent of average monthly trading profits capped at £7,500;
  • The online service for claiming the third grant opened on 30 November 2020;
  • Applications for the third grant will close on 29 January 2021; and
  • Details of the fourth grant have yet to be decided.

The SEISS – the role of agents

For the first and second grants, agents were unable to make claims on behalf of their clients. According to HMRC, developing the functionality for agents to make claims on behalf of clients was one of the difficult trade-offs made in delivering the system as early as possible to get money to eligible self-employed taxpayers. This is also the case for the third and fourth grants.

In addition, anyone who is digitally excluded or Northern Ireland self-employed individuals who do not have a Government Gateway (“GG”) ID (and cannot verify their identity perhaps because they have an Irish passport) are required to claim over the phone.

The SEISS - tax treatment of amounts received

Grant payments received by a business under the SEISS should be included as a source of taxable income in the financial statements of the relevant business and will therefore be subject to both income tax and self-employed national insurance contributions, in accordance with normal principles.

However, no SEISS grants should be included in 2019/20 self-assessment tax returns due to be filed by 31 January 2021. The first, second and third grants should be reported on 2020/21 self-assessment tax returns due to be filed online by 31 January 2022).

The SEISS - dealing with HMRC

The contact details for the SEISS are available on GOV.UK. HMRC advice is to only use these contact channels if you cannot get the help you need online.

The SEISS - useful links

Make sure to bookmark the relevant SEISS pages on GOV.UK on your web browser to ensure you’re getting the most up to date information.

Links to the most up to date guidance and related sources of information are provided below:-

  • Guidance on the first and second grants under the scheme;
  • Guidance on the extended scheme.

The SEISS – service availability

Members are also advised to regularly check the availability and any issues affecting the online SEISS portal so that they can provide their clients with the most up to date information.

If you have a specific query or issue in respect of the SEISS or any other COVID-19 support which HMRC are administering, please check if your query is covered anywhere on GOV.UK or in our hub before contacting UK Taxation Specialist Leontia Doran.

Chartered Accountants Ireland can accept no responsibility for the content on any site that is linked to from the Institute website. Links are provided in good faith for the potential support of members and students.