Self-Employment Income Support Scheme (SEISS): The Government’s Coronavirus Grant

The UK Government has unveiled a groundbreaking support package for self-employed workers affected by the COVID-19 pandemic. The Self-Employment Income Support Scheme (SEISS) aims to provide financial assistance to millions of self-employed individuals across the country. Here’s everything you need to know about this crucial initiative.

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

SEISS is a government programme designed to help self-employed workers who have lost income due to the coronavirus outbreak. Under this scheme, eligible individuals can receive taxable grants worth up to 80% of their average monthly profits, capped at £2,500 per month.

Who is eligible for SEISS?

To qualify for the scheme, you must meet the following criteria:

1. More than half of your income should come from self-employment.
2. Your average annual trading profit must be less than £50,000.
3. You must have filed a tax return for the 2018/19 tax year.

It’s worth noting that the scheme is expected to cover about 95% of those who earn the majority of their income from self-employment.

How much can you receive?

The grants will be calculated based on your average monthly profits over the last three tax years (2016/17, 2017/18, and 2018/19). If you became self-employed after April 2018, only your 2018/19 tax return will be used for the calculation.

The maximum amount you can receive is £2,500 per month, which is equivalent to the support being offered to furloughed employees under the Coronavirus Job Retention Scheme.

When and how will the money be paid?

The first payments are expected to be made at the beginning of June. The initial grant will cover March, April, and May, and will be paid as a lump sum directly into your bank account.

How to apply for SEISS

The application process is straightforward:

1. HM Revenue & Customs (HMRC) will contact eligible individuals directly.
2. You’ll be asked to fill in an online form.
3. The grant will then be paid directly into your bank account.

There’s no need to contact HMRC at this stage – they will reach out to you once the scheme is operational.

What if you’re not eligible or need immediate support?

If you don’t meet the criteria for SEISS or need financial assistance before June, there are other options available:

1. Business Interruption Loans: You can apply for loans, overdrafts, invoice finance, or asset finance of up to £5 million for up to six years.
2. Income Tax Deferral: If you have income tax payments due in July 2020, you can defer them until January 2021.
3. Universal Credit: The government has removed the ‘minimum income floor’ for universal credit, making it easier for self-employed individuals to access this benefit.
4. Use tax money for immediate expenses: Consider using money set aside for tax to cover urgent costs, as the July self-assessment payment can now be deferred until January 2021.

Key points to remember about SEISS

• You don’t have to stop working to claim the grant.
• The scheme currently covers three months but may be extended.
• If you became self-employed after April 2019, you won’t be eligible for this scheme.
• Company directors who pay themselves a salary or dividends aren’t covered by this scheme but may be eligible for the Coronavirus Job Retention Scheme.

The bigger picture

SEISS is part of a broader package of measures introduced by the UK Government to support businesses and individuals during these challenging times. While it may not cover everyone, it represents a significant step towards providing a safety net for millions of self-employed workers.

As we navigate through this unprecedented situation, it’s crucial to stay informed about the various support options available. Keep an eye on official government announcements and reliable financial advice sources for the most up-to-date information.

If you’re struggling financially, don’t hesitate to explore all available options and seek professional advice if needed. Remember, we’re all in this together, and support is available to help you through these difficult times.