The chancellor's third plan to help the self-employed help

Under the new round of the Self-Employment Income Support Scheme (SEISS), which opens on 1 November, self-employed workers will be able to apply for a grant of up to 40% of their typical three-monthly profits, up to a maximum of £3,750. This is twice the maximum payout of £1,875 initially promised by the chancellor, when he said in October that a third round of grants would be made available to cover the trading period from 1 November to 31 January 2021. But it compares poorly to payouts of up to £7,500 and £6,750 offered during earlier iterations of the scheme.

The latest grant also has more exacting criteria. In previous rounds, self-employed workers only had to show they had been adversely affected in some way by the pandemic; they will now be required to show they have been hit by falling demand specifically. This means, for example, self-employed people unable to work because they are self-isolating will not be able to apply for this award, although they would have been eligible previously.

Otherwise, the eligibility rules from the previous rounds of the SEISS remain in place. Self-employed workers need to have filed a tax return for the 2018-2019 financial year and earn more than 50% of their total income from self-employment. They must also have an average annual trading profit of less than £50,000 a year. The government has also promised a fourth round of the SEISS, with grants available to cover the period from 1 February 2021 to 30 April 2021, though it has not yet decided what they will be worth. Self-employed workers who think they are eligible for the third round grants can apply via the government’s online portal at Gov.uk.

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David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.