Self-employment Income Support Scheme

Our second webinar on the Self-employment Income Support Scheme (SEISS) took place on Tuesday 7 July 2020 when we provided a recap of the scheme and looked at what’s new – for more details see here.

See here for a recording of our first webinar about the Self-employment Income Support Scheme - CIOT/ATT webinar held on 7 May 2020

Who is eligible and who isn’t?
Trading profits and losses
Compliance aspects
The claims process factors applicable to both the first and second payments
The claims process - first SEISS grant
The claims process – second and final grant

Latest updates:

03/07/2020

Applications for the second and final grant
Guidance on different circumstances
Treasury Directions
Taxation of coronavirus support payments
How long will the scheme last for?
The claims process – second and final grant
How do I make my claim?
Is there a deadline for making the second claim?

On 26 March 2020, the Chancellor announced that the Government would provide support to self-employed workers in the form of a cash grant of 80% of their profits, up to £2,500 per month for three months. This is known as the Coronavirus (COVID-19) Self-employment Income Support Scheme (SEISS). The scheme went live on 13 May 2020.

On 29 May 2020, the Chancellor announced that the SEISS would be extended with those eligible able to claim a second and final grant in August. The grant will be worth 70% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total. Applications for the second and final grant will open on 17 August 2020. Applications for the first payment will continue until 13 July 2020.

See HMRC’s factsheet explaining the impact of the scheme so far and the announcement made on 29 May – here.

On 17 June 2020, the Government announced an extension of the scheme for armed forces reservists and certain people with parental responsibilities who would not otherwise qualify for support under the scheme – see here and here.

Guidance on how to use the scheme, including who can claim and the amount of grant payable, is here.

HMRC’s Eligibility Checker is here.

Guidance on how to claim a grant through the Self-Employment Income Support Scheme is here.

To make your claim click here.

Guidance on how to work out your total income and taxable profits for the SEISS is here.

Guidance on different circumstances, such as for late returns, partners in a partnership, those who have loans covered by the loan charge, those on parental leave, military reservists, non-residents, those claiming averaging relief and those near or above the state aid limits, is here. For what 'Adversely affected by coronavirus’ means and some examples – see here.

HMRC has published two Treasury Directions under Sections 71 & 76 of the Coronavirus Act 2020 which set out the legal framework for the SEISS here.

Draft legislation to introduce rules on how grants received under the SEISS will be taxed was published on 29 May 2020 for a short consultation until 12 June - see here. The legislation also gives HMRC powers to recover payments to which recipients were not entitled to, and to charge a penalty in cases of deliberate non-compliance. Our response can be found here. The legislation was introduced as a Report Stage amendment to the Finance Bill on 24 June 2020 – see here.

An explainer about the scheme can be found on the CIOT’s Low Incomes Tax Reform Group’s website and also on the ATT website.

Query	Status / response
Who is eligible and who isn’t
What is the position for property lettings businesses, including furnished holiday lettings? Do they qualify for the SEISS?	No, the SEISS scheme only applies to individuals who complete the self-employment or partnership trading pages of the self-assessment tax return. These pages exclude income from property, which includes furnished holiday lettings.
Will people working in the construction industry qualify for the SEISS?	Yes, if they are self-employed and meet the eligibility criteria.
Does one look at the trading profits and total income at partner level or at partnership level when working out whether a partner in a partnership is eligible to claim a SEISS grant?	HMRC’s guidance says that a member of a partnership can make a claim for the SEISS grant and that eligibility is based on the partner’s share of the partnership’s trading profits. See example here.
Are all trading partnerships included even those with a corporate partner?	Yes, but only to the extent that they have partners who are individuals. The partners that are incorporated are not covered by the SEISS.
I’m resident and domiciled outside the UK. Can I claim under the SEISS?	Yes, you may be eligible, although you need to compare your trading profits with your worldwide income - see HMRC’s guidance here.
Can trusts claim the SEISS?	No, you cannot claim the grant if operating a trade through a trust – see here.
Can you claim the SEISS grant and continue to work?	Yes, you can receive the grant and continue to work in your self-employed business, start a new trade and also take on other employment including voluntary work or duties as an armed forces reservist.
If an individual has remained self-employed throughout the 2016/17, 2017/18 and 2018/19 tax years but has changed what they do, for example, running a café, then closing it down and becoming a window cleaner, does this matter?	No, so long as you were self-employed in 2018/19 and the other eligibility criteria are met.
Are the self-employed who started trading during 2019/20 eligible for the SEISS?	No, if you were not self-employed in the 2018/19 tax year and so did not submit a 2018/19 tax return showing any self-employed income then you are not eligible for the SEISS. You may qualify for other government support.
I didn’t submit my 2018/19 tax return by 23 April 2020. Can I still claim?	No, if you didn’t submit your 2018/19 tax return on or before 23 April 2020 you will not be able to claim.
What’s the position with State Aid?	The scheme is a state aid granted under the European Commission’s Temporary Framework (section 3.10 'Aid in the form of wage subsidies'), designed to respond to coronavirus (COVID-19). This means that there is no requirement that those eligible need to confirm they are below the €800,000 aid cap.
Can dentists claim under the SEISS for their private (non-NHS) work?	HMRC have confirmed that overall as long as they meet the criteria for the SEISS, dentists can claim on the basis that they have income from non-NHS work. For further information see here.
Trading profits and losses
How does it work when a taxpayer has made a loss in one of the tax years on which the grant will be based?	In-year losses are taken into account as well as profits in calculating a person’s eligibility for the grant and the amount of the grant they will receive. See here.
What if an individual is self-employed with more than one trade at the same time? Do you combine them?	Yes, if a person has more than one trade in the same tax year, HMRC will add together all the profits and losses for all the trades to work out the trading profit. See here.
Are ‘trading profits’ pre or post farmers’ and creative industries averaging relief?	HMRC will use the profit before farmers’ averaging relief to work out whether a person is eligible to claim the grant and how much grant they will receive. See here.
If I started being self-employed during the 2018/19 tax year, will my trading income and profits be extrapolated to be expressed as an annual rate when looking at whether I am eligible to receive the grant?	No, if you started being self-employed during 2018/19, for example on 6 October 2018, HMRC will look at your actual trading income and profits for the 6 months of trading. They will not be extrapolated to be expressed as an annual amount. See here.
Compliance Aspects
Is the grant taxable?	Yes, the grant received will be subject to Income Tax and Class 4 National Insurance Contributions.
When is the grant taxable (in which tax year)?	The SEISS grant is taxable in the year of receipt (i.e. 2020/21), meaning that there will be no apportionment back to the tax year 2019/20. It should therefore be reported in full on your 2020/21 self-assessment tax return.
How long will the scheme last for?	It is a temporary scheme. Those eligible must make their claim for the first grant on or before 13 July 2020 and must make their claim for the second and final grant on or before 19 October 2020. Applications for the second and final grant open from 17 August 2020.
How is the requirement to show that a business has been adversely affected as a result of the COVID-19 crisis to be determined?	To be eligible to claim the grant, you will need to confirm to HMRC that your business has been adversely affected by coronavirus. For further details see HMRC’s guidance - here and here. HMRC will use a ‘risk based approach’ to check a person’s compliance with the scheme rules and will take action in cases of suspected fraud.
Was it possible to amend a 2018/19 tax return before 23 April 2020, for example if one had been using the cash basis, the trading allowance or had claimed capital allowances, and had reported lower profits as a result?	No, if a person amends their 2018/19 tax return after 6pm on 26 March 2020 (the date the Chancellor announced the scheme), any changes will not be taken into account when working out their eligibility for the SEISS or the amount of the grant.
I submitted my 2018/19 tax return to HMRC between 26 March and 23 April. I’m sure I’m eligible, but HMRC’s eligibility checker is saying I’m not. What should I do?	HMRC are updating their systems for those people who have very recently filed their 2018/19 tax returns, and this is why the system won’t necessarily show a positive answer yet. Don’t ask for a review at this stage. Instead you should keep checking back as HMRC are working at pace to update their systems.
I submitted my 2018/19 tax return between 26 March and 23 April. Will I still get a £100 penalty for failing to submit my return by 31 January 2020?	Yes, late filing penalties will apply as normal for all 2018/19 returns filed after the 31 January 2020 deadline (but special provisions apply for those people affected by the loan charge – see below).
What’s the position if a person has received loans impacted by the loan charge?	If you had loans impacted by the loan charge, you are going to declare a loan charge or settle your disguised remuneration scheme involvement with HMRC by 30 September 2020, and you are going to claim a grant through the SEISS, your grant will be based on either: the average of the tax years 2016/17 and 2017/18 the tax year 2017/18 if you were not self-employed in the tax year 2016/17 You should file your self-assessment tax return for 2018/19 by 30 September 2020. It does not have to be submitted by 23 April 2020. See HMRC’s guidance on the disguised remuneration loan charge on GOV.UK (updated on 7 April 2020).
The claims process – factors applicable to both the first and second payments (Guidance specific to each of the payments, including relevant dates, is after this section)
Will HMRC work out how much I’m entitled to?	Yes, HMRC will work out the amounts due to you based on information that was submitted in your tax returns.
How will HMRC identify taxpayers whom they consider will be eligible?	HMRC will use data submitted on 2018/19 and earlier tax returns already submitted to identify eligible individuals.
What if I am told I am not eligible to make a claim, but I disagree?	You can ask for a review of HMRC’s decision. You do this via the eligibility checker - see here. See SEISS eligibility review request screenshots.
What if I am told I am not eligible to make a claim, but I disagree – can my agent ask for a review on my behalf?	Yes, agents can ask for a review of their client’s eligibility status. They do this via the eligibility checker – see here. The agent enters the client’s UTR and NINO. If it says they are ineligible, they can launch the online gForm to request a review of their client’s eligibility. The online gForm launches and the first question asks ‘are you an agent?’ They are then able to proceed to request an eligibility review on behalf of their client.
Will I need a Government Gateway account to apply?	Yes, you will need to have set up a Government Gateway account and have your user ID and password to be able to apply. This will be explained in HMRC’s message.
Do I have to make my claim though GOV.UK?	Yes, you must claim through GOV‌.UK using your Government Gateway user ID and password. ⚠️ If someone gets in touch claiming to be from HMRC, saying that financial help can be claimed or that a tax refund is owed, and asks you to click on a link or to give information such as you name, credit card or bank details, do not respond. It is a scam. Suspicious emails claiming to be from HMRC should reported to HMRC by sending them to phishing [at] hmrc.gov.uk. Texts should be sent to 60599.
What if I disagree with how HMRC have worked out the amount of my payment?	You should still proceed with your claim even if you disagree with the amount. Make sure you print or screenshot HMRC’s calculation. If you have an agent discuss it with them. If you still disagree with the amount, you can ask HMRC to review it by completing a review form. You will need to log onto the Government Gateway to complete the form. See SEISS grant amount review request screenshots.
Can agents request a review of the amount of the payment on behalf of their clients?	Yes, agents can request a review of their client’s award amount here. Agents should use their own government gateway (GG) log in details, and then complete the online form on behalf of their client. They will need: Their client’s grant claim reference; Their client’s NI number; Their client’s UTR Details about why they think the amount is wrong. See p.15 onwards in SEISS grant amount review request screenshots.
What about those who happen to be digitally excluded for some reason?	For people unable to apply online there are alternative ways to claim using webchat or telephone. For more information see here.
Will taxpayers have to deal with applying for the SEISS themselves or can they ask their authorised agents to apply for them?	Taxpayers must make the claim themselves. Tax agents or advisers cannot make the claim on their clients’ behalf. If an agent uses their client’s Government Gateway credentials to make claims on their behalf, it will trigger a fraud alert and the claim will be rejected and the business will have to reapply (either using their own Government Gateway credentials or by telephone). This will therefore result in delays to receiving payment. You should contact your adviser, if you have one, if you need help or support in making your claim.
The claims process - first SEISS grant
When will HMRC contact self-employed taxpayers whom they consider will be eligible?	HMRC began contacting people in the week beginning Monday 4 May 2020 through a combination of emails, SMS texts and letters to tell them what to do to get ready to claim.
What should I do when HMRC contact me?	HMRC’s message will direct you to their new online 'Eligibility Checker' (see here). If the checker confirms you are eligible (and you meet the qualifying criteria), you will be given a date to use the online service to make your claim from 13 May 2020.
What if I am told I am not eligible to make a claim, but I disagree?	You can ask for a review of HMRC’s decision. You do this via the eligibility checker - see here. HMRC will undertake these reviews after 18 May, with a view to providing a response by the end of May. See SEISS eligibility review request screenshots.
What if I am told I am not eligible to make a claim, but I disagree – can my agent ask for a review on my behalf?	Yes, agents can ask for a review of their client’s eligibility status. They do this via the eligibility checker – see here. The agent enters the client’s UTR and NINO. If it says they are ineligible, they can launch the online gForm to request a review of their client’s eligibility. The online gForm launches and the first question asks ‘are you an agent?’ They are then able to proceed to request an eligibility review on behalf of their client. HMRC will undertake these reviews after 18 May, with a view to providing a response by the end of May.
I’m eligible. How do I make my claim?	The online claims service opened on Wednesday 13 May 2020. Make your claim from the date HMRC gave you when you checked your eligibility.
I've tried to claim before the date HMRC gave me when I checked my eligibility, and I received the message 'You are not eligible to make a claim'. What should I do?	You should try again on or after your allocated claim date. If you still get the same message you should submit a request for a review through the eligibility checker - see here.
Is there a deadline for making a claim for the first SEISS grant?	Yes, applications for the first grant will close on 13 July 2020.
What period is the first grant for?	The first grant covers the period up to and including 13 July 2020. Your business must have been adversely affected by coronavirus and you must meet all the other eligibility criteria in the period up to 13 July 2020 to qualify for the first grant.
When will payments be made?	HMRC will aim to make payments by 25 May 2020, directly into applicants' bank accounts (this can be either a personal or a business bank account), or within six working days of completing a claim.
What if I disagree with how HMRC have worked out the amount of my payment?	You should still proceed with your claim even if you disagree with the amount. Make sure you print or screenshot HMRC’s calculation. If you have an agent discuss it with them. If you still disagree with the amount, you can ask HMRC to review it by completing a review form. You will need to log onto the Government Gateway to complete the form. See SEISS grant amount review request screenshots.
Can agents request a review of the amount of the payment on behalf of their clients?	Yes, agents can request a review of their client’s award amount here. Agents should use their own government gateway (GG) log in details, and then complete the online form on behalf of their client. They will need: Their client’s grant claim reference; Their client’s NI number; Their client’s UTR Details about why they think the amount is wrong. See p.15 onwards in SEISS grant amount review request screenshots.
The claims process – second and final grant
What period is the second and final grant for?	The second and final grant covers the period on or after 14 July 2020. Your business must have been adversely affected by coronavirus on or after 14 July 2020 and you must meet all the other eligibility criteria in the period on or after 14 July 2020 as well to qualify for the second grant.
Can I claim the second payment if I didn’t claim the first one?	Yes, you don’t need to have claimed the first payment to claim the second one. You will still need to meet the eligibility criteria which are the same for both payments. Individuals will need to confirm that their business has been adversely affected by coronavirus during the later phase when claiming the second payment.
When will HMRC contact self-employed taxpayers whom they consider will be eligible?	The online claims service is not open yet. Do not contact HMRC, further details will be available nearer the time.
What should I do when HMRC contact me?	Further details will be available nearer the time.
How do I make my claim?	The online claims service will open on 17 August 2020. Further details will be available nearer the time.
Is there a deadline for making the second claim?	Yes, claims must be made on or before 19 October 2020.
When will payments be made?	Further details will be available nearer the time.

Latest updates:

03/07/2020

Applications for the second and final grant Guidance on different circumstances Treasury Directions Taxation of coronavirus support payments How long will the scheme last for? The claims process – second and final grant How do I make my claim? Is there a deadline for making the second claim?

Who is eligible and who isn’t

What is the position for property lettings businesses, including furnished holiday lettings? Do they qualify for the SEISS?

No, the SEISS scheme only applies to individuals who complete the self-employment or partnership trading pages of the self-assessment tax return. These pages exclude income from property, which includes furnished holiday lettings.

Will people working in the construction industry qualify for the SEISS?

Yes, if they are self-employed and meet the eligibility criteria.

Does one look at the trading profits and total income at partner level or at partnership level when working out whether a partner in a partnership is eligible to claim a SEISS grant?

HMRC’s guidance says that a member of a partnership can make a claim for the SEISS grant and that eligibility is based on the partner’s share of the partnership’s trading profits. See example here.

Are all trading partnerships included even those with a corporate partner?

Yes, but only to the extent that they have partners who are individuals. The partners that are incorporated are not covered by the SEISS.

I’m resident and domiciled outside the UK. Can I claim under the SEISS?

Yes, you may be eligible, although you need to compare your trading profits with your worldwide income - see HMRC’s guidance here.

Can trusts claim the SEISS?

No, you cannot claim the grant if operating a trade through a trust – see here.

Can you claim the SEISS grant and continue to work?

Yes, you can receive the grant and continue to work in your self-employed business, start a new trade and also take on other employment including voluntary work or duties as an armed forces reservist.

If an individual has remained self-employed throughout the 2016/17, 2017/18 and 2018/19 tax years but has changed what they do, for example, running a café, then closing it down and becoming a window cleaner, does this matter?

No, so long as you were self-employed in 2018/19 and the other eligibility criteria are met.

Are the self-employed who started trading during 2019/20 eligible for the SEISS?

No, if you were not self-employed in the 2018/19 tax year and so did not submit a 2018/19 tax return showing any self-employed income then you are not eligible for the SEISS. You may qualify for other government support.

I didn’t submit my 2018/19 tax return by 23 April 2020. Can I still claim?

No, if you didn’t submit your 2018/19 tax return on or before 23 April 2020 you will not be able to claim.

What’s the position with State Aid?

Can dentists claim under the SEISS for their private (non-NHS) work?

HMRC have confirmed that overall as long as they meet the criteria for the SEISS, dentists can claim on the basis that they have income from non-NHS work. For further information see here.

Trading profits and losses

How does it work when a taxpayer has made a loss in one of the tax years on which the grant will be based?

In-year losses are taken into account as well as profits in calculating a person’s eligibility for the grant and the amount of the grant they will receive. See here.

What if an individual is self-employed with more than one trade at the same time? Do you combine them?

Yes, if a person has more than one trade in the same tax year, HMRC will add together all the profits and losses for all the trades to work out the trading profit. See here.

Are ‘trading profits’ pre or post farmers’ and creative industries averaging relief?

HMRC will use the profit before farmers’ averaging relief to work out whether a person is eligible to claim the grant and how much grant they will receive. See here.

If I started being self-employed during the 2018/19 tax year, will my trading income and profits be extrapolated to be expressed as an annual rate when looking at whether I am eligible to receive the grant?

No, if you started being self-employed during 2018/19, for example on 6 October 2018, HMRC will look at your actual trading income and profits for the 6 months of trading. They will not be extrapolated to be expressed as an annual amount. See here.

Compliance Aspects

Is the grant taxable?

Yes, the grant received will be subject to Income Tax and Class 4 National Insurance Contributions.

When is the grant taxable (in which tax year)?

The SEISS grant is taxable in the year of receipt (i.e. 2020/21), meaning that there will be no apportionment back to the tax year 2019/20. It should therefore be reported in full on your 2020/21 self-assessment tax return.

How long will the scheme last for?

It is a temporary scheme. Those eligible must make their claim for the first grant on or before 13 July 2020 and must make their claim for the second and final grant on or before 19 October 2020. Applications for the second and final grant open from 17 August 2020.

How is the requirement to show that a business has been adversely affected as a result of the COVID-19 crisis to be determined?

To be eligible to claim the grant, you will need to confirm to HMRC that your business has been adversely affected by coronavirus. For further details see HMRC’s guidance - here and here.

HMRC will use a ‘risk based approach’ to check a person’s compliance with the scheme rules and will take action in cases of suspected fraud.

Was it possible to amend a 2018/19 tax return before 23 April 2020, for example if one had been using the cash basis, the trading allowance or had claimed capital allowances, and had reported lower profits as a result?

No, if a person amends their 2018/19 tax return after 6pm on 26 March 2020 (the date the Chancellor announced the scheme), any changes will not be taken into account when working out their eligibility for the SEISS or the amount of the grant.

I submitted my 2018/19 tax return to HMRC between 26 March and 23 April. I’m sure I’m eligible, but HMRC’s eligibility checker is saying I’m not. What should I do?

I submitted my 2018/19 tax return between 26 March and 23 April. Will I still get a £100 penalty for failing to submit my return by 31 January 2020?

Yes, late filing penalties will apply as normal for all 2018/19 returns filed after the 31 January 2020 deadline (but special provisions apply for those people affected by the loan charge – see below).

What’s the position if a person has received loans impacted by the loan charge?

If you had loans impacted by the loan charge, you are going to declare a loan charge or settle your disguised remuneration scheme involvement with HMRC by 30 September 2020, and you are going to claim a grant through the SEISS, your grant will be based on either:

the average of the tax years 2016/17 and 2017/18

the tax year 2017/18 if you were not self-employed in the tax year 2016/17

You should file your self-assessment tax return for 2018/19 by 30 September 2020. It does not have to be submitted by 23 April 2020. See HMRC’s guidance on the disguised remuneration loan charge on GOV.UK (updated on 7 April 2020).

The claims process – factors applicable to both the first and second payments (Guidance specific to each of the payments, including relevant dates, is after this section)

Will HMRC work out how much I’m entitled to?

Yes, HMRC will work out the amounts due to you based on information that was submitted in your tax returns.

How will HMRC identify taxpayers whom they consider will be eligible?

HMRC will use data submitted on 2018/19 and earlier tax returns already submitted to identify eligible individuals.

What if I am told I am not eligible to make a claim, but I disagree?

You can ask for a review of HMRC’s decision. You do this via the eligibility checker - see here.

See SEISS eligibility review request screenshots.

What if I am told I am not eligible to make a claim, but I disagree – can my agent ask for a review on my behalf?

Will I need a Government Gateway account to apply?

Yes, you will need to have set up a Government Gateway account and have your user ID and password to be able to apply. This will be explained in HMRC’s message.

Do I have to make my claim though GOV.UK?

Yes, you must claim through GOV‌.UK using your Government Gateway user ID and password.

⚠️ If someone gets in touch claiming to be from HMRC, saying that financial help can be claimed or that a tax refund is owed, and asks you to click on a link or to give information such as you name, credit card or bank details, do not respond. It is a scam.

Suspicious emails claiming to be from HMRC should reported to HMRC by sending them to phishing [at] hmrc.gov.uk. Texts should be sent to 60599.

What if I disagree with how HMRC have worked out the amount of my payment?

See SEISS grant amount review request screenshots.

Can agents request a review of the amount of the payment on behalf of their clients?

Yes, agents can request a review of their client’s award amount here. Agents should use their own government gateway (GG) log in details, and then complete the online form on behalf of their client. They will need:

Their client’s grant claim reference;

Their client’s NI number;

Their client’s UTR

Details about why they think the amount is wrong.

See p.15 onwards in SEISS grant amount review request screenshots.

Applications for the second and final grant
Guidance on different circumstances
Treasury Directions
Taxation of coronavirus support payments
How long will the scheme last for?
The claims process – second and final grant
How do I make my claim?
Is there a deadline for making the second claim?

The claims process – factors applicable to both the first and second payments
(Guidance specific to each of the payments, including relevant dates, is after this section)

HMRC will aim to make payments by 25 May 2020, directly into applicants' bank accounts (this can be either a personal or a business bank account), or within six working days of completing a claim.