The latest news on grants for the self-employed

The Budget in March aimed to extend the financial help packages offered by the government to working people impacted by the pandemic. For those people employed but not working, this help has come via an extension to the furlough scheme. For the self-employed the Chancellor announced two new grant schemes to run concurrently, to provide financial assistance through to the end of September this year, via the scheme known as SEISS. A significant change is that these latest two grants will be available to newly self-employed people who became self-employed during the 2019/20 tax year and were previously excluded from making a claim for SEISS grants.
 
What has changed?
The three previous SEISS grants were open only to those who had filed a tax return for 2019/19. The new grants, which will cover firstly February to April, then May to September this year will also be open to self-employed people who filed their tax return (for 2019/20) before midnight on 2 March 2021. Those wanting to claim will also need to declare that they are currently trading but have been impacted by the coronavirus leading to reduced income and not simply increased costs, or that they were trading but have been temporarily unable to do so during the pandemic. They will also need to confirm that they intend to continue to trade in 2021/22.
 
How much will the grant be?
The fourth SEISS grant will cover February to April and will be a taxable grant calculated at 80% of three months’ average trading profits. Your trading profits must be no more than £50,000 and at least equal to your non-trading income. The grant can be claimed from late April and will be paid out in a single instalment and capped at £7,500 in total. HMRC will contact those people who are eligible for the SEISS payment in mid-April to give them a claim date but individuals will need to make the claim themselves to receive the grant
 
The fifth (and final) round of SEISS payments will cover May to September and will comprise 80% of three months’ average trading profits, capped at £7,500 if your turnover has been reduced by more than 30%, or alternatively 30% of trading profits, capped at £2,850 if your business has seen only a modest reduction in turnover of less than 30% due to COVID.  More details on the fifth grant will be provided as soon as the government makes them available.
 
Are there self-employed people who can’t claim SEISS?
Yes, SEISS can’t be claimed by company directors, self-employed people who earned more than £50,000 and those who earned less than half their income from self-employment. It is understood that the risk of fraudulent claims is the main reason why SEISS has not been extended to company directors.
 
Since March 2020 when the country went into lockdown, 2.7 million self-employed people have been able to claim support, and by the time the last grant SEISS scheme has ended they will have paid approximately £33 billion to this group, which is expected to number more than 600,000.  
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If you need help or advice on SEISS or other government support that you think you or your business may be entitled to, please get in touch on 0330 058 6559
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