Explainer: the Self-Employment Income Support Scheme - are you eligible and how can you access it?

Following sustained lobbying from IPSE and other organisations, on 26 March the government announced a new package of financial aid for the self-employed, called the ‘Self-Employment Income Support Scheme’ (SEIS).

The scheme will support self-employed individuals – specifically sole traders and members of partnerships - whose income has been negatively impacted by COVID-19.

The scheme will provide a taxable grant to self-employed individuals or partnerships, worth 80% of their profits up to a cap of £2,500 per month. This is based on past tax returns - HMRC will use the average profits from your 2018-19 (and 2016-17 and 2017-18 if applicable) tax returns to calculate the size of the grant.

The eligibility criteria are as follows. You:

  • have submitted your Income Tax Self Assessment tax return for the tax year 2018-19
  • traded in the tax year 2019-20
  • are trading when you apply, or would be except for COVID-19
  • intend to continue to trade in the tax year 2020-21
  • have lost trading/partnership trading profits due to COVID-19
  • have self-employed trading profits of less than £50,000 (on average if across more than one year) and more than half of your income comes from self-employment

If you fulfil these criteria and are eligible for the scheme, HMRC will contact you and invite you to apply online. The scheme will apply for 3 months but may be extended. The government has said that the grants are expected to be paid out by the beginning of June – they will be paid directly to eligible claimants’ bank accounts.

Finally, if you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you can be considered for the scheme but you must do this by 23 April 2020.

Full information about the scheme is available here: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

IPSE has welcomed this package but we acknowledge there are omissions, particularly in terms of those who are Limited Company contractors and those who are newer to self-employment and yet to file a tax return. You can read more thoughts on the package from our Director of Policy, Andy Chamberlain, here. We will keep working with government to plug any gaps and at the same time provide as much information and support to those who the scheme does not cover.

In recent weeks, the government has announced a number of measures designed to support self-employed people through the crisis. These include loans, the option of tax deferrals, and changes to Universal Credit. For a full summary of what is available to you please visit the FAQ section on our website

Although we are unable to advise individuals about their personal circumstances we have also collated information from the government and authoritative sources to support you in making the decisions necessary for your business. This is a fast-moving picture and we are endeavouring to keep this as up to date as possible. You can also contact us at [email protected], however we are experiencing a high volume of messages so we may not be able to get back to you right away. 

Meet the author

Alasdair Hutchison

Policy Development Manager