Self-Employment Income Support Scheme (SEISS)

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

The Self-Employment income support scheme, also known as SEISS, was introduced by the government to support self-employed employees throughout the coronavirus outbreak. The scheme offers a grant payment worth 80% of someone’s monthly trading profit, for a three-month period, worth up to £7500 in total.

The first round of the grants opened for applications on 13^th May 2020 and then closed on 13^th July 2020, as more lockdown followed in 2020, two more grants were made available to apply for.

On 3^rd March 2021 it has been announced a fourth grant will be available to apply for from the end of April and thereafter a fifth grant to cover up until September 2021. The Fifth Grant is likely to be capped at a higher amount due to it covering a longer period.

Each grant covers the following periods:

1st Grant: April 2020 to June 2020 (3 Months)

2nd Grant: July 2020 to October 2020 (3 Months)

3rd Grant November 2020 to January 2021 (3 months)

4th Grant: February 2021 To April 2021 (3 months)

5th Grant: May 2021 to September 2021 (5 months)

How is the SEISS Calculated?

The first 3 grants that were available for self-employed individuals to apply for, was based on their total income for 2018/19 tax year, this would be the amount on their 2018/19 tax return that was submitted to HMRC. However, each grant then multiplies the profit figure by a certain percentage (dependent on the grant applied for), and then the amounts paid are capped.

Unlike the first three grants, the fourth grant, available to apply for in April, will be based on the individual’s total income on their 2019/20 tax return. This has been good news to the 600,000 self-employed individuals who missed out on the first three grants because they had only become self-employed in the 2019 tax year.

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

Who was eligible for the first 3 SEISS grants?

In order to be eligible for a grant under SEISS, all of the following must apply (please note that when we refer to self-employed this includes a partner in a partnership and when we refer to self-employment income/profits this includes partnership trading income/profits):

• You submitted a Self-Assessment tax return for the 2018/19 tax year, which included self-employment profits, by 23 April 2020 (see What if I have not submitted my 2018/19 tax return yet? and exceptions for certain groups of individuals).
• You were self-employed in the 2019/20 tax year and traded for at least part of that year
• You intended to continue trading in this tax year (2020/21) for at least part of the remainder of the year (or would do so but for coronavirus)
• You carry on a trade which has been adversely affected by the coronavirus. For the first grant, you needed to have been adversely affected at some point on or before 13 July 2020. For the second grant, you needed to have been adversely affected at some point on or after 14 July 2020 up to the closure of claims for second grants on 19 October 2020. There were additional conditions for the third grant.

Please note you can no longer apply for the first three grants.

Who is eligible for the fourth and fifth grants?

Unlike previous SEISS grants, the fourth and fifth grants are also open to people who became self-employed for the first time between 6 April 2019 and 5 April 2020. With the fourth grant they will look at your 2019 to 2020 Self-Assessment tax return, trading profits must be no more than £50,000 and at least equal to your non-trading income.

• To be eligible for the fourth grant you again must be a self-employed individual or a member of a partnership.
• You must have traded in tax year 2019 to 2020 and submitted your tax return by 2 March 2021, and still have been trading in tax year 2020 to 2021
• 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 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

Please note you can no longer apply for these two grants.

How to claim

The fourth SEISS grant will be available to claim through the government’s website from late April 201 until May 2021, this is so HMRC can process any tax returns submitted for the 2019/2020 tax year.

HMRC will contact anyone who is eligible in Mid-April to give you your personal claim date, this will be the date you can make your claim from.

What do we know about the Fifth and final Grant?

There will be a fifth and final grant covering May to September, claims for this grant can be made from late July if you are eligible.

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.

How SEISS payments should have been reported

Payments from the first, second and third SEISS grants (received on or before 5 April 2021) should have been included on your 2020 to 2021 return in the box for Self-Employment Income Support Scheme grants. These can be found:

• on page 2 of the ‘other tax adjustments’ section, within the Self Employment (full) page (SA103F) – this is Box 70.1 on the paper return
• in the ‘other tax adjustments’ section of the Self Employment (short) page (SA103S) – this is Box 27.1 on the paper return
• on page 2 of the ‘trading or professional profits’ section of the partnership page (SA104) – this is Box 9.1 on the paper return
• at section 3.10A of the SA200 tax return

HMRC are correcting returns where SEISS grants have been reported incorrectly.

If HMRC have corrected your return, you must check whether you used the correct boxes or not.

If you reported SEISS payments in the correct box

If the amount of SEISS payments you reported did not match HMRC records, HMRC will have adjusted your tax return to match their records and send you a revised tax calculation.

You must check the figure HMRC put on your revised tax calculation against your records.

You can do this by signing in to the SEISS online claims service, which will tell you how much you received for each grant. Alternatively, you can check the bank account you used to receive payments.

If the figures do not match, phone the Coronavirus (COVID-19) helpline for businesses and self-employed people.

If you reported SEISS payments in the incorrect box

If you did not use the approved box (for example, you put your SEISS grants in the ‘turnover’ or ‘any other income’ boxes instead), you need to update your return to remove the SEISS amount from the incorrect box or boxes.

If you do not correct your return, you’ll be charged twice for tax and self-employed National Insurance on the payments you received. If you’re expecting a repayment and do not correct your tax return, you will receive a reduced amount or may have a bill you were not expecting.

You can update your return online or talk to your tax adviser about correcting the error.

If you included your SEISS grants in an incorrect part of your return (such as the ‘turnover’ or ‘any other income’ boxes), you can make amendments by phoning: 0300 200 3310.

Amendments for other reasons must still be made online or by writing to HMRC.

If you did not report SEISS payments

If HMRC records showed you received SEISS payments, but you did not report them in your return, HMRC will add the amount shown in their records and send you a revised tax calculation.

This adjustment may mean:

• your expected repayment is reduced
• your tax bill is increased
• you have an unexpected bill

The updated tax calculation shows how the change has affected your payments on account. You need to pay any tax owed by 31 January 2022.

You can access your bill online or talk to your tax adviser to understand how your payments have been affected.

If you did not submit a self-employment or partnership page

If you did not need to submit a self-employment or partnership page with your 2020 to 2021 Self-Assessment tax return, you will not have been eligible to claim SEISS grants.

If your HMRC records show you did receive SEISS payments, HMRC may have added the amount of these payments to your return and sent you a revised tax calculation. HMRC will expect you to recover any SEISS payments you were not eligible for.

If you were eligible for SEISS but forgot to submit a self-employment or partnership page, you need to update your return to include those pages, or talk to your tax adviser.

Further support

If you have any questions regarding the SEISS grant, or how to now declare these in your tax return, then please contact Rebate My Tax direct where one of our experts can help you out.

All other information regarding the SEISS Scheme can be found on the government’s website here.