Government launches final Covid support scheme for the self-employed

A fifth and final round of the government’s aid scheme for the self-employed, with grants of up to £7,500, has been launched.

There is good news for self-employed workers still struggling with the financial impact of Covid-19. The government has now opened applications for the fifth – and final – round of the self-employment income support scheme (SEISS). You could be entitled to a grant of up to £7,500.

The eligibility criteria for the SEISS are broadly unchanged, and HM Revenue & Customs will look at your previous tax returns to check you meet the basic requirements. These are that you traded in both the 2019/2020 tax year – and submitted your self-assessment tax return for that period on or before 2 March 2021 – and the 2020/2021 tax year. 

Further key conditions are that at least 50% of your total income must come from self-employment and your average trading profit should be no more than £50,000.

In addition, you need to be able to show that you reasonably believe your trading profits during the period from 1 May to 30 September 2021 will be lower because of Covid-19. You could be asked to supply evidence. It may be that you have been unable to trade because of lockdown restrictions during that period; or you may be suffering reduced demand or capacity.

Turnover tiers

What you’ll get from the SEISS depends on how badly you have been affected. This is a departure from previous rounds of the scheme, which paid flat rates of support. This time, if your turnover fell by 30% or more in 2020/2021 compared with 2019/2020 or 2018/2019, you will be able to claim 80% of your average three-month trading profit, capped at a maximum of £7,500. If your turnover declined by less than 30%, you can only claim 30% of your average three-month profit, up to a maximum of £2,850. In theory, HMRC is supposed to contact everyone it thinks may be eligible for the fifth round of the SEISS in order to invite them to apply. It began sending out those invitations in the second half of July – by text message, email and letter – but is staggering the process so that the system isn’t overwhelmed. 

If you haven’t heard from HMRC by the middle of August and believe you may have been missed out, it is worth contacting the tax authority directly.

Applications for the scheme have to be made online by 30 September through HMRC’s SEISS portal pages. You will need a variety of data to complete the application, including turnover figures for the relevant tax years, your national insurance number, your self-assessment unique taxpayer reference (UTR) number, and your bank account details. HMRC will check your details and is committed to paying you within six working days of receiving your claim. 

Importantly, awards from the SEISS are grants, not loans, and do not have to be repaid. If you’re entitled to the money, you should definitely make a claim.

Nonetheless, self-employed workers are entitled to feel aggrieved about some aspects of the scheme. One issue is that while this round covers a five-month period, it only pays out on the basis of three months’ profit. More broadly, the SEISS is far less generous than the furloughing scheme that helps employed people whose employers are struggling with the pandemic. Bear in mind too that hundreds of thousands of self-employed workers continue to miss out on any help at all – including those who have paid themselves through dividends from their companies. If you’re not eligible for help, you may be able to claim universal credit, but this won’t come close to matching the value of the SEISS.

Recommended

The US Federal Reserve is about to rein in its money-printing – what does that mean for markets?
US Economy

The US Federal Reserve is about to rein in its money-printing – what does that mean for markets?

America’s central bank is talking surprisingly tough about tightening monetary policy. And it’s not the only one. John Stepek looks at what it all mea…
23 Sep 2021
The uranium price is soaring – here’s the best way to play it now
Energy

The uranium price is soaring – here’s the best way to play it now

Uranium, the key ingredient to nuclear power, has been ignored since the bubble of 2006, but now the uranium price is rising again. Dominic Frisby exp…
22 Sep 2021
I wish I knew what contagion was, but I’m too embarrassed to ask
Too embarrassed to ask

I wish I knew what contagion was, but I’m too embarrassed to ask

Most of us probably know what “contagion” is in a biological sense. But it also crops up in financial markets. Here's what it means.
21 Sep 2021
Why is the UK short of CO2 and what does it mean for you?
UK Economy

Why is the UK short of CO2 and what does it mean for you?

The UK is experiencing a carbon dioxide shortage that could lead to empty shelves in supermarkets. Saloni Sardana explains what’s going on and how it …
21 Sep 2021

Most Popular

Two shipping funds to buy for steady income
Investment trusts

Two shipping funds to buy for steady income

Returns from owning ships are volatile, but these two investment trusts are trying to make the sector less risky.
7 Sep 2021
Should investors be worried about stagflation?
US Economy

Should investors be worried about stagflation?

The latest US employment data has raised the ugly spectre of “stagflation” – weak growth and high inflation. John Stepek looks at what’s going on and …
6 Sep 2021
The times may be changing, but don’t change how you invest
Small cap stocks

The times may be changing, but don’t change how you invest

We are living in strange times. But the basics of investing remain the same: buy fairly-priced stocks that can provide an income. And there are few be…
13 Sep 2021