SEISS in detail, with Q&A

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Rishi Sunak’s announcement last night (26/3/20), confirmed that the self-employed will be able to apply for a taxable grant of up to £2,500 per month, worth up to 80% of their average monthly profits, under the new Self-Employed Income Support Scheme (SEISS).

Whilst an unprecedented move from government that will be applicable to “95% of the self-employed”, clearly not everyone will be able to claim these grants. We take a look at who, when and how and for other support mechanisms for those who do not meet that criteria and those who need help sooner.
Chancellor Sunak this week confirmed that self-employed people across the UK will be able to get an amount equivalent to 80% of their income, based on their average profits (not turnover), up to a maximum of £2,500 a month.

It is anticipated that these grants will start to be paid at the beginning of June, as a taxable lump sum covering March, April and May. And while the scheme’s initially to cover these three months, the Chancellor has said that this may be extended.

BiKBBI will continue to apply pressure on government to bring these payments forward, but in fairness to them, the delay in payments is due to system complexities and the physical building of mechanisms to handle and qualify applications and indeed make the payments. Not easy.

Mr Sunak added that the measures were expected to apply to around 95% of those who earn the majority of their income from self-employment, but a significant number won’t be able to apply for support from the scheme. This includes those with average annual trading profits (your taxable profits NOT turnover) of £50k or more, and those who have become self-employed since April 2019 and so haven’t filed a tax return yet.

How much could the grants be worth?

The grants will be worth 80% of your profits, capped at £2,500 a month, based on your tax returns for 2016/17, 2017/18 and 2018/19 if you were self-employed over that period.
If you became self-employed after April 2018, your 2018/19 tax return will be used instead. But it’s worth noting that if you only have a few months’ self-employment on your 2018/19 return, this will be counted as your total profit for the year – the Government won’t pro-rata it based on your monthly profits.

Who will be eligible for the scheme?

To apply to the new Self-Employment Income Support Scheme, the following must apply:

  • You must earn more than half of your total income from self-employment. This must have been the case for either your 2018/19 tax return or the average of your last three years’ tax returns: 2016/17, 2017/18 and 2018/19 tax returns (or both).
  • Your average annual trading profit (NOT turnover) must be less than £50,000. Those with average annual trading profits exceeding £50,000 or will not be eligible for this scheme. Note that government guidance states your average annual trading profit will be calculated from either your 2018/19 tax return or the average of your 2016/17, 2017/18 and 2018/19 tax returns.It’s not clear from the Government guidance which of these is used if the figures differ although clarification will made over the next few days.
  • You must have filed a tax return for 2018/19. This means you must have been self-employed prior to 6 April 2019. If you were due to file a 2018/19 tax return but missed the deadline this year, you’ll have until Sunday 26 April to submit your tax return, after which you can access the scheme.
  • If you’re a company director and pay yourself a salary or dividends you won’t be covered by this scheme, but you could get support through the Coronavirus Job Retention Scheme for employees if you operate pay-as-you-earn schemes.

How do I apply to the scheme?

Those eligible will be contacted directly by HM Revenue & Customs – the Government hasn’t said when this’ll be, only that it will happen “once the scheme is operational”. At that point you’ll be asked to fill in an online form, and the grant will then be paid directly into your bank account.

There’s no need to contact HMRC now as there’s nothing you can do to apply at this stage. If you believe you’re eligible and don’t hear anything when HMRC does start contacting people, contact it at that stage – we’ll be following the scheme closely and keeping you fully updated.
I’m eligible but can’t wait until June – what can I do?

Even if you are eligible for help from this scheme, it’s unlikely you’ll see any cash in your bank account until June at the earliest, which for many will be a struggle.
In the meantime, as above you can try applying for a business interruption loan if eligible, or universal credit (for universal credit, the grant will be treated as earnings – but check if you can apply for support before it comes through).

In addition, it may also be worth using money you have set aside for tax to cover immediate expenses until your grant comes through in June. This especially applies given the July self-assessment tax payment can be deferred until January 2021.



Q. If I apply for the grant, do I have to stop working?
A. No, that’s not a requirement – you can continue working and earning if you’re able to once you’ve applied, and this won’t have any impact on you getting a grant.

Q. I’ve only become self-employed this year and haven’t had the chance to file a tax return yet – can I apply?
A. No, unfortunately not. If you weren’t able to file a tax return for self-employed earnings in 2018/19, you won’t be able to apply.

Q. What if my business was just getting started and I made a loss?
A. The grant you’ll get is based on your average monthly profits – so if you made a loss, unfortunately you won’t be able to get anything. However, check other support available, such as a business interruption loan or universal credit.

Q. Will the scheme be extended beyond the next three months?
A. It’s possible – while initially there will be a payment in June to cover March, April and May earnings, the Chancellor said it may be extended.
If it is, we don’t yet know whether payments would be made monthly – we’ll be following this closely and posting full updates in our Coronavirus Financial Help & Rights guide.

Q. What if I get a grant then have a really good year – will I need to pay it back?
A. The Treasury hasn’t said there will be a ‘clawback’ of the grants if you end up with high overall earnings in 2020/21 – but we’re double-checking and will update this story when we know more.

If you’ve got a question we haven’t answered above, let us know at (unfortunately we’re not able to answer every email directly, but all are read).

What does the Government say?

Chancellor Rishi Sunak said: “Self-employed people are a crucial part of the UK’s workforce who have understandably been looking for reassurance and support during this national emergency.

“The package for the self-employed I’ve outlined today is one of the most generous in the world that has been announced so far. It targets support to those who need help most, offering the self-employed the same level of support as those in work.”Together with support packages for businesses and for workers, I am confident we now have the measures in place to ensure we can get through this emergency together.”

I’m not eligible for a grant – what other help is available?

Not all self-employed people can access this help – for example, if you earn more than £50,000 a year. If you’re not eligible unfortunately you won’t be able to claim, but you have other options:

Managing existing debt

Whilst not a government initiative, many finance companies and general lenders are offering payment deferrals for personal and commercial mortgages, business loans and finance products such as Hire Purchase agreements.

As these obligations often form a significant part of individuals and companies outward cashflow, it is highly recommended that you contact your lenders directly to discuss your options.

You can apply for a ‘business interruption loan’

The temporary Coronavirus Business Interruption Loan Scheme is open to self-employed people and offers access to loans, overdrafts, invoice finance and asset finance of up to £5 million for up to six years.

The government has effectively offered to indemnify banks for up to 80% of loans issued to businesses impacted by COVID 19.
This measure is expected to free up additional lending by the banks and is available on loans up to £5m. Initial feedback on this facility is, however, not very positive. Businesses are still expected to present business plans to their bank as part of this facility.

The Government could also give you a ‘business interruption payment’ to cover the first 12 months of interest and fees on the loan. The scheme is now open for applications, and is offered by all major banks.


The government has announced that VAT liabilities for all VAT registered UK businesses and individuals will be deferred for payments due between 20th March and 30th June 2020.
At the moment it is assumed that this will apply to all businesses irrespective of size although further clarification may be forthcoming. The deferral will be to early 2021 and further clarification on that will be issued shortly.

VAT returns must still be submitted on time. If you pay via BACS or cheque, you will simply not make the payment.
If paying by the direct debit facility you must contact your bank to cancel that direct debit arrangement, otherwise payment will still be taken by HMRC.

Income tax payments
Self-assessment tax payments due by the end of July 2020 are being deferred until January 31st 2021. It is understood that this will apply to tax liabilities arising from self-employment but there is no indication that this applies to those with liabilities arising from investment income, rental income or other forms of income untaxed, or not fully taxed at source.

Time to Pay

HMRC are extending facility to all tax payers who wish to defer existing tax debts over a longer period. This facility has been in place since the last economic downturn. HMRC will entertain proposals from tax payers to pay any taxes (corporation tax, VAT, PAYE) upon reasonable presentation of the facts of their current hardship.
It is likely that written assertions to settle debt will be expected from HMR&C and they have advised that they will act as ‘lender’ of last resort rather than first resort.

Job Retention Scheme

The government will support employers by making payments to businesses to cover 80% of the wage costs of ‘furloughed’ workers up to £2,500 per employee per month. The payments will be backdated to 1st March 2020 and the scheme will currently operate for 3 months. The concept of a ‘furloughed’ worker is broadly somebody who would have otherwise been made redundant as a consequence of reduced demand for services or productivity. It is not presumed to be an alternative to sick pay where an individual is forced to self-isolate or may be unfortunately off sick due to infection.

A furloughed worker should be advised (preferably in writing by their employer) that their status has changed. The furloughed worker should have absolutely no involvement in work from that point. It is only the employer that can make the decision in relation to the change of status. It is not yet clarified as to whether this scheme applies to owners where the owner is a salaried director although it would seem somewhat inequitable if it didn’t.

The employer may wish to enhance the 80% from HMRC but that is optional. Given that the alternative may be redundancy it is expected that most employees and employers will reach a mutually satisfactory agreement on these matters.

At the moment, HMRC are still designing the online platform to facilitate claims from employers and this is unlikely to be ready until early April, with payments being processed later in that month.

You can access universal credit in full

The Government has removed the ‘minimum income floor’ to the universal credit benefit, and will be boosting the standard allowance from Monday 6 April – meaning a single person aged over 25 could get a standard monthly allowance of £409.89. See your rights if you’re self-employed for more info.
Business Rates

Businesses operating from commercial premises and for whom Small Business Rates Relief may apply, may be able to obtain grants from their local authority of up to £10,000.
Businesses in the leisure, hospitality or retail sector who are most impacted by the COVID 19 may be able to receive a full year’s payment holiday for rates and access grants up to £25,000.
This is primarily aimed at businesses with commercial properties with a rateable value of between £15,000 and £51,000.

The above provisions will be administered by local authorities and further clarification on their application is expected.

Useful Contacts
Provides details of all the above measures and more.

HMRC Time to Pay helpline
0800 0159 559

For all businesses and individuals.
General HMR&C helpline
0800 0241 222 - For all queries.

It is vitally important that members contact their accountants or HMRC should they have any queries in relation to the above measures and before taking action.

As indicated above, detail on these measures are changing daily and your advisors will be best placed to update you.

Best wishes to all during these difficult times.

Stay Healthy. Stay at home.



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