COVID-19 Self-Employment Income Support Scheme (SEISS)

The effects of Covid-19 have hit every corner of our society. The furlough scheme for employees helped thousands of workers during the lockdown period and meant that mass layoffs were for the most part avoided.

Thankfully, a similar scheme was also introduced for the self-employed sector of the workforce. This was SEISS(Self-Employment Income Support Scheme).

This system was designed to help replace the majority of the profits for self-employed workers lost due to the effects of the lockdown. While the first period of grants has ended, there will be a second chance for self-employed workers to apply for another grant starting from August 17th 2020.

However, there are certain criteria that HMRC requests that you meet before you are accepted. So what are these criteria, and how can you make sure that you meet them? Furthermore, after that, how do you go about applying for the self-employment grant? Let us look a little deeper into what the SEISS is and how you can apply.

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

The government announced the scheme to help support self-employed workers negatively impacted by the effects of the lockdown on March 26th 2020. It went live on May 13th, 2020.

Under the scheme, those classed as self-employed have the option to apply for a grant to cover a percentage of their lost income. The first grant covered 80% of a self-employed worker’s profits, up to £2,500 per month for three months.

As the lockdown continued, the scheme was extended, and a second grant was announced. This second grant covered 70% of average monthly profits, being paid in a single instalment, up to £6,570. The grants do not have to be repaid but are still eligible for Income Tax and National Insurance.

The hope is that these grants will help self-employed workers stay afloat during this period of uncertainty. With the uncertainty surrounding so many sectors of work at the current time, this grant could help prevent many thousands of self-employed business from failing.

It is important to remember before starting the application process that the scheme is new and the team dealing with applications are reduced in number, due to the coronavirus restrictions. This means that any response you get to your application may well take longer than is ideal, especially as there will be many thousands of applicants all submitting their applications at the same time.

Are you eligible?

This scheme was designed specifically for those who have lost most of their work due to the COVID-19 lockdown. They are specific criteria that applicants must first meet.

Applications for the first grant were closed on July 13th 2020. However, the second grant will be open for applications from August 17th 2020.

For the second grant, if you are self-employed or in a partnership, then your business must have been impacted either on or after July 14th 2020.

Your self-employed work may have been impacted due to multiple reasons, including but not limited to:

Having to shield
Self-isolating
Having carer responsibilities
Interruptions in the supply chain
Lack of staff
Lack of customers

Make sure that you keep records of all the ways your business has been affected. These may be needed in your application later on.

You will only be eligible if the following reasons apply to you:

You worked during the tax year 2018/19 and submitted your tax return on or before April 23rd 2020
You worked in the tax year 2019/20
You plan to carry on working in the tax year 2020/21
You continue working in a trade which has been affected by COVID-19

You will not be eligible if you work through a limited company or trust.

Even if you did not apply for the first grant, you would still be eligible to apply for the second grant, once it becomes available on August 17th 2020.

HMRC works out your eligibility based on your 2018/19 Self Assessment tax return, and if your profits over that time exceed £50,000, then you may not be eligible.

You can use HMRC’s helpful eligibility checker to ensure that you can apply for the grant. This can be found on their website.

How to apply?

While the first grant is no longer available, you will be able to apply for the second grant from August 17th until October 19th 2020.

To apply, you will need to visit HMRC’s SEISS claims portal. This will go live online when the application process for the second grant opens up on August 17th, 2020.

Along with filling out the application process, to apply for the grant you will also need:

A Government Gateway ID and password
UK bank details such as account number, sort code, name, and address

If at any point in the process, you are confused or find yourself needing more explanation of the income support scheme and how you can apply, the GOV.UK portal has plenty of resources. They can point you towards relevant information and resources that can demystify the process and allow you to get the help you need as quickly as possible.

COVID-19 Self-Employment Income Support Scheme is there to help!

During these hard times, the self-employed have been hit harder than many. Because of the nature of being self-employed, many of the support systems and safety nets that are available to those employed by businesses are not available. As we have seen, the SEISS has been put in place quickly to support those self-employed workers who are struggling due to the COVID-19 lockdown.

While the first grant period has already passed us by, the second will soon be opening to applicants. If you are a self-employed worker and need more help or information when it comes to applying for help from the income support scheme, then contact one of our employment solicitors! Our experts are on hand to help with any questions you may have and can guide you through the process of applying for support.