SEISS: How to apply for the self-employment grant

If you’re self-employed and have been affected by the pandemic, you may be eligible to claim a grant though the Self-Employment Income Support Scheme (SEISS). The scheme first opened in May 2020 and was worth 80% of past average monthly trading profits for those eligible. Since then, a second grant worth 70% was opened in August and closed for applications on 19 October and a third SEISS grant, worth 80%, was opened to claim on or before 29 January. A fourth SEISS grant covered the three-month period from the start of February until the end of April, with a different application process and eligibility requirements to previous rounds.

In late June, a fifth SEISS grant will open, covering the five-month period from May to September 2021. This grant will be worth either 80% or 30% of three months’ average trading profits, depending on how much your turnover has been reduced.

 

When to apply for the fifth grant

HMRC will contact those eligible for the fifth grant to provide them with the date on which they can submit their application. HMRC is expected to begin this process in mid-July, with applications expected to begin from late-July.

How the fifth grant is different 

The amount you can claim under the fifth grant will now be based on turnover reduction in the year April 2020 to April 2021. The grant will provide two levels of cover – 80% or 30% – based on your turnover reduction:

  • If turnover is reduced by 30% or more, you will receive 80% of three months’ average trading profits (capped at £7,500)
  • If turnover is reduced by less than 30%, you will receive 30% of three months’ average trading profits (capped £2,850)

HMRC will provide further information on how to calculate your turnover reduction later this month.

Fifth SEISS grant claim process

The full details on applying for SEISS 5 are not yet available, but here’s what we know so far:

1. Check for your eligibility for the SEISS grant

To be considered eligible for SEISS 5, you must have filed a 2019-20 tax return before 2 March 2021 and traded in the 2020-21 tax year, earned most of your income though trading, and have average trading profits of less than £50,000. Your business must also either be currently trading but impacted by “reduced demand” or be “unable to do so”.

If you are not eligible based on your 2019-20 tax return, HMRC will then look at the tax years 2016-2017, 2017-2018, 2018-2019 and 2019-2020.

You must also declare that you intend to continue to trade, and that 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 from May 2021 to September 2021”.

Unfortunately, HMRC has provided no clear definition of what constitutes a “significant reduction” in trading profit. HMRC has previously said it cannot make this decision for a business because individual and wider business circumstances will need to be considered and you will need to make an “honest assessment”.

2. Gather evidence for your SEISS claim

In order to submit a claim, you must show that the coronavirus pandemic and concurrent lockdowns have had a negative impact on your business.

As noted above, you must declare that you intend to continue to trade and that you reasonably believe your trading profits will be significantly reduced due to Covid-19 from May-September.

As such, it is worth keeping some evidence of the impact Covid-19 has had on your business.

To show you have experienced reduced demand, examples of evidence include:

  • Business accounts showing reduction in activity compared to previous years
  • Records of reduced or cancelled contracts or appointments
  • Fewer invoices
  • A record of dates where you had reduced demand or capacity due to government restrictions

If your business is temporarily unable to trade, you should keep any evidence, such as:

  • A record of dates where you had to close due to government restrictions
  • NHS Test and Trace communications - if you’ve been instructed to self-isolate in-line with NHS guidelines and are unable to work from home (if you’ve been abroad and have to self-isolate, this does not count)
  • A letter or email from the NHS asking you to shield
  • Test results if you’ve been diagnosed with coronavirus
  • Letters or emails from your child’s school if you have had parental caring responsibilities

3. Make your SEISS claim

In preparation for SEISS 5, it is worth ensuring you have access to information that has been required when applying for previous grants. These are:[FH1] 

  • Your Self-Assessment Unique Taxpayer Reference (UTR)
  • Your National Insurance number
  • Your Government Gateway user ID and password – if you do not have an existing user ID you can create one when you claim
  • Your UK bank details including a bank account number, sort code, name on the account and your address linked to your bank account

This page will be updated as further information about SEISS 5 is made available. The GOV.UK guidance for the fifth grant can be found here.

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