Guidance on the COVID-19 Self-Employment Income Support Scheme

Page updated 20 October 2020

On 24 September 2020, the Chancellor announced that the Self-Employment Income Support Scheme (SEISS) will be extended, however it will be limited to self-employed individuals who are currently eligible for the SEISS and are actively continuing to trade but are facing reduced demand due to COVID-19.

The extension will provide two grants. The first of these will be 20% of three months average self-employed profit, with this profit figure being based on the same eligibility and calculations as the first two SEISS grants, capped at £1,875 total. The second amount is yet to be announced.

Although the HMRC factsheet misleadingly refers to the grants as covering from November to January and February to April, HMRC have confirmed to accountancy bodies that none of the SEISS grants relate to any particular periods or seek to replace lost income over a particular period and it is not intended to provide a month by month replacement of income. The lump sum payment is to support eligible self-employed individuals’ businesses who have been adversely affected by coronavirus and is calculated by reference to three months’ average trading profits.

Grants will be paid in two lump sum instalments, dates yet to be confirmed but we are hoping the first may be available before the end of November.

Find out more from HMRC.

The potential pitfalls for the third and fourth SEISS grants are the two conditions 'actively continuing to trade but facing reduced demand'. The 20% SEISS calculation basis is comparable with the maximum 22% offered to employers through the Job Support Scheme, for jobs that are ‘viable’ but facing reduced demand. Therefore, if you are continuing to earn part of your income from some teaching, or the occasional socially distanced gig, your business is actively continuing to trade. If you have no work at all, this condition may be difficult to satisfy. It is likely that the condition that you are 'facing reduced demand' should apply at some point between the 1 November and the date you make the claim. We are still awaiting detailed guidance to be published.

This page is intended for information only and should not be considered as a substitute for financial advice.

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