UK Government support measures

Self-employment Income Support Scheme Extension

What is it?

The Self-employment Income Support Scheme (SEISS) will provide grant support to self-employed individuals (including members of partnerships) whose income has been negatively impacted by COVID-19.

SEISS was extended further from November 2020 to April 2021. The extension will be in the form of two taxable grants at 40% of trading profits. The first grant will cover a three-month period from the start of November until the end of January.

The UK Government announced on 5 November 2020 that the support to the self-employed will be increased to 80 per cent of trading profits between November 2020 and January 2021. The maximum grant will increase to £7,500. The online claims window will open on 30 November 2020.

The UK government will set out further details on the SEISS grant covering February to April, including the level of the grant, in due course.

Is this grant subject to tax?

Yes – individuals will pay Income Tax and National Insurance on any payments received through this scheme as they are replacement for income in line with normal practice for benefits or grants that replace income. The grant is recognised as income for the purposes of Universal Credit and Tax Credits and may impact the amount claimants are entitled to.

What should self-employed people do while they wait to be paid?

In the interim, self-employed individuals may be eligible for universal credit. The government has provided over £6.5bn of additional support through the welfare system for those affected by Coronavirus.

Why does this scheme not cover small businesses who are incorporated?

Self-employed individuals who are owner-managers and pay themselves a salary through PAYE will be eligible for support through the Coronavirus Job Retention Scheme. SMEs can also access support through the temporary Coronavirus Business Interruption Loan Scheme. This supports SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years.

This new Self-Employment Income Support Scheme is open to anyone who reports trading profits through Income Tax Self-Assessment. Self-employed individuals who work through a company do not report their trading profits in this way.

Am I eligible?

To be eligible for the scheme you must meet all the criteria below:

• have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)

• declare that they intend to continue to trade and either:

• are currently actively trading but are impacted by reduced demand due to coronavirus

• were previously trading but are temporarily unable to do so due to coronavirus/partnership trading profits due to Coronavirus.

How do I access it?

Guidance has been updated with a YouTube video about how to claim SEISS, third grant. Watch the video and register for the free webinars to learn more about how to claim the third grant.

When can I access it?

The online service for the next grant will be available from 30 November 2020.