1. How do you get a SEISS grant when you are self-employed?
2. What is the SEISS grant?

3. Who is eligible?

4. How much can I claim?
5. Does the self-employed grant count as income?
6. Will I have to pay the money back?
7. Summary

How to get a SEISS grant when you're self-employed

August 16, 2021

Throughout the coronavirus pandemic, the government has been supporting those that are self-employed through a series of grants called the Self-Employment Income Support Scheme – otherwise known as the SEISS. So far there have been four rounds of this grant, supporting 2.9 million people across the UK and costing the government a total of £25.2 billion.The fifth and final round is now open for applications, so if you're self-employed or a member of a partnership interested in claiming the SEISS grant, this article is for you.We are covering everything that you need to know about the fifth grant, including what it is, the eligibility criteria, and how to make the claim.

How do you get a SEISS grant when you are self-employed?

The government will contact you if you are eligible to claim the Self-Employed Income Support Scheme (SEISS) grant. As of 29 July 2021 and throughout early August 2021, self-employed individuals and small business owners are being contacted to apply for the grant. HMRC is sending the individuals contacted their own application date to apply on. This date will vary depending on your Self Assessment tax return that you filed on or before 2 March 2021. If you are eligible, you can apply online through the GOV.UK website and expect to be paid within 6 working days. We will break down the step by step guide on how to apply for the fifth SEISS grant below. But first, let's look at what it actually is.

What is the SEISS grant?

The Self-Employment Income Support Scheme grant was created by the government to support self-employed individuals in the coronavirus pandemic. Almost every business has been affected by the global pandemic and as such, this grant was introduced in an attempt to subsidise some of the losses that affected businesses have incurred. There have already been four rounds of SEISS grants, the first grant offered in May 2020, the second grant in August 2020, the third grant in November 2020 and the fourth SEISS grant in April 2021, which recently came to an end in June.Since then, many self-employed individuals have been waiting patiently for the fifth and final grant application to open.

What is the fifth SEISS grant?

This fifth SEISS grant is the last in the series of grants provided by the government. HMRC will be contacting all of those eligible to apply from the 29th July 2021 throughout early August 2021. If you were eligible to receive the grant in the fourth round, you'll also be eligible for the fifth since both rounds have the same requirements. The criteria for these rounds are a step up from previous SEISS grants, which received criticism after following an all-or-nothing approach.The two most recent rounds of grants depend on individual circumstances and the individual drop in turnover. We explore this further below.

When can I apply for the fifth SEISS grant?

Applications for this fifth and final grant have been officially open since May, and are due to close on 30 September 2021.Since late July 2021, HMRC have been contacting self-employed individuals to notify them of their individual date to apply. If contacted, you'll be advised to make the claim for the SEISS grant either on or after the claim date that they have allocated to you. The dates selected have been staggered based on your Self Assessment tax return.You can make your application online through the GOV.UK website. As we have identified, you will first receive a notification from HMRC informing you of when to apply for the grant. You might receive this notification through an email, text or letter. If you do not receive anything, but think you might be eligible, you can also use the online SEISS portal to apply.

How do I apply for the fifth SEISS grant?

To apply for this self-employment income support scheme there are certain things that you will need:

Self Assessment Unique taxpayer reference (UTR)

National Insurance number

Government Gateway user ID and password

UK Bank details (for an account that can accept Bacs payment)

When you apply, you must declare that you intend to continue trading and that you expect a significant reduction in trade due to the pandemic between May 2021 and September 2021. A significant reduction in trade might include reduced business activity and demand, an inability to trade due to self-isolation or lockdown, or a significant decrease in the past few months' average trading profits.You can claim the fifth SEISS grant here. You simply need to follow the step by step guidance on the online form. You should receive your grant within six working days; however, if you do not receive it within this time period, it is advised to wait a further four working days before contacting HMRC.

Who is eligible?

This is probably the most important question when it comes to the SEISS grant. What qualifies as eligible has changed since the earlier rounds of the grant back in 2020. To help clarify whether or not you are eligible for the fifth grant, we have broken down the requirements that are needed by HMRC.You must have filed a 2019/20 tax returnIn order to calculate whether or not you are eligible for the grant, you need to have submitted your Self Assessment tax return for this tax year. As long as you submitted this on or before 2 March 2021 then the scheme is open to you. You must have traded in 2019/20 and 2020/21 You also need to have proof of trading during the 2019/20 tax year. HMRC will use the information provided on your Self Assessment tax return from this tax year to see if you're eligible. You also need to show that you traded during 2020 and that you intend to continue trading throughout 2021. You expect a significant reduction in trade In order to be eligible, you also need to show that you are expecting a significant reduction in trade between May and September 2021. This might seem a little ominous. However, if you can state that you expect to experience reduced activity, capacity and demand or an inability to trade due to the pandemic, then you meet this requirement.However, it is time-sensitive. If you were struggling earlier in the year but are no longer having issues, unfortunately you won't be eligible. You have to expect a significant reduction in trade between the months of May and September in 2021. Remember you have until September to apply, so if you are unsure you can wait until then to complete the application.Make sure that you keep evidence to support your statement that you expect to experience reduced trade, for example, comparable financial forecasts from previous years. You will need to be honest and realistic with your assessment for HMRC. 50% of your total income is through self-employmentAt least 50% of your total income needs to come through self-employment. This will be determined by your 2019/20 Self Assessment tax return. If it is not clear from this, then HMRC will also check through your 2016/17, 2017/18, 2018/19 tax returns as well. If you only began trading in 2019/20, your previous tax history will not be taken into consideration as it is not relevant.You may have received income through different means such as other jobs, property, savings, dividends and taxable benefits. If you make more than 50% of your income through these, you will not be eligible for the grant. Average trading profits are £50,000 or lessAnother requirement for the grant is that your average trading profits must be £50,000 or less. If you earn even a penny more, then you'll no longer be eligible for the SEISS grant. However, if you earned more than £50,000 in the 2019/20 tax year and are not eligible for the grant, HMRC will take the previous four years into consideration. If over these four years you were making on average below the £50,000 threshold, you might still be eligible for the grant.

Who isn't eligible?

In a nutshell, if you don't meet the above criteria you can be fairly sure that you are not eligible for the SEISS grant.If you are not eligible for the fifth SEISS grant, you may still be entitled to further financial support through other means, such as Universal Credit.

How much can I claim?

The amount that you can claim through the SEISS grant varies depending on how much your turnover has been reduced between April 2020 and April 2021. You will either receive support payments worth 30% or 80% of your average trading profits for a three month time period. If your turnover figures have decreased by 30% or more, then you will receive a grant worth 80% of the average profits over a three month period. This is capped at a maximum of £7,500. On the other hand, if your turnover has been decreased by less than 30% then the grant amount is worth 30% of the average profits over a three month period. This is capped at a maximum of £2,850.To help figure this out, use this formula:Average trading profit / 12 x 3 Start with the average trading profits that you have made either over the 2019/20 tax year or across the four previous tax years. Then divide this by twelve to see what you made on average each month, and then multiply this by three to calculate what the three month period is worth. For example: £45,000 / 12 = £3,750 x 3 = £11,250If you are eligible for 80% of £11,250 then this is worth £9000. However, the cap is £7,500 so you will actually only receive £7,500. If you are eligible for 30% of £11,250 then this is worth £3,375. However, again the cap is £2,850 so this is what you will receive.

Does the self-employed grant count as income?

The SEISS grant does count as a form of income and is indeed taxable. Income Tax and National Insurance contributions are both deducted from any SEISS payments you receive. It also counts towards your annual allowance for your pension contribution.When you submit your 2021/22 Self Assessment tax return, you'll need to include how much SEISS grant you received from HMRC.

Will I have to pay the money back?

The money provided through the SEISS is considered a grant, and as such no repayment measures are necessary.However, if you were accidentally overpaid by HMRC for this grant, you'll need to pay it back immediately to avoid any penalties in the future. You can do this using their online form.

Summary

If you're still unsure about whether or not you're eligible for the SEISS grant, remember that all Ember users have direct access to qualified accountants who are happy to provide further information and support throughout the process. In addition to this, our handy app holds all your records in one place to help you quickly locate your tax information.

Cam FinneyHead of CX

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