SELF-EMPLOYED workers can now apply for the third round of coronavirus support from the government worth up to £7,500.
The self-employment income support scheme (SEISS) gives grants to help those who work for themselves if their income has been negatively impacted.
Self-employed workers can apply for the grant from today, November 30
SEISS has so far given out two rounds of grants to the self-employed since the pandemic began.
The third SEISS grant opened for applications today, November 30, and for many it will be important to check if they are eligible for support.
Applications for the first grant closed on July 13, 2020 and the second grant, worth up to £6,570, opened for applications on August 17 and closed on October 19, 2020.
Then in September, Chancellor Rishi Sunak announced a third grant as he extended the self-employed scheme to help workers survive the winter.
Earlier this month, Mr Sunak increased the grant to £7,500, covering 80% of trading profits for November to January.
But self-employed workers still have to meet a stringent set of criteria to be eligible for the payout as the government seeks to avoid widespread fraud.
So before you miss the chance of claiming, we’ve outlined how to check if you’re eligible for the SEISS grant, how much you’ll get and how to apply.
How to check you’re eligible for a third self-employment grant
For those unsure of whether they are elible for the third grant, there’s a simple checklist of criteria to go through:
- In order to claim the payout, self-employed workers must have been eligible for the first and second grant – even if you didn’t claim them. (This is with the exception of some people who became eligible after a couple of rule changes in August, which are outlined below.)
- You must declare that you intend to continue to trade and that you’re either currently actively trading but are impacted by reduced demand due to the coronavirus.
- Alternatively, you must declare that you were previously trading but are temporarily unable to do so due to the pandemic.
- You must have filed a tax return for 2018/19, meaning you must have been self-employed before April 6, 2019.
- You must also earn more than half of your total income from self-employment.
- Your trading profit must be less than £50,000 a year.
The grants are calculated based on an average of your profits over three tax years – 2016/17, 2017/18 and 2018/19.
If you didn’t trade in 2016/17, then it will be based on your average profits in 2017/18 and 2018/19, or in 2018/19 if that’s the only year you traded.
Sadly, self-employed workers who are company directors or run their businesses as limited companies can’t apply.
But if you claim maternity allowance this will not affect your eligibility for the grant.
How have the eligibility rules changed?
The government tweaked the rules on August 17 so you may have been eligible to claim the second grant and now the third despite missing out on the first payout.
New parents who were excluded from the first grant because they were pregnant or caring for a new child may now be able to make a claim.
Self-employed mums and dads who didn’t file their taxes for one or more of the following reasons are now included in the scheme:
- Because you were pregnant or you gave birth,
- You were caring for a child under the age of one,
- You were caring for an adopted child who had been with you for less than a year.
In order to qualify, you’ll also need to meet the other criteria, such as you must have been self-employed in 2017/18 and submitted a tax return for the year before April 23 2020.
New parents had to fill out an online form asking for HMRC to verify the information about their new child before October 5 2020.
You needed your child’s full name and date of birth, the date of adoption, child benefit number and your child’s birth certificate.
You also had to let HMRC know whether you were claiming maternity allowance.
Military reservists who were previously excluded from the scheme can now apply for the help too.
But to be eligible, you must be self-employed and have carried out reservist activities for at least 90days during the period your 2018/19 profits are calculated.
Could I have lost my eligibilty from the first two grants?
The government has also changed the rules for the third grant and this could now rule out some workers who were eligible for the first two grants.
Self-employed workers are now only eligible if they are currently actively trading but are impacted by “reduced demand” due to the coronavirus.
It’s important to note that the phrase “reduced demand” is an alteration from “adversely affected” outlined in the rules for the first two grants.
So this could affect your eligibility and means gathering evidence of “reduced demand” is now crucial.
This includes proof that you have fewer customers or clients than you would normally expect, resulting in reduced activity due to social distancing or government restrictions.
It could be that you have one or more contracts that have been cancelled and not replaced or you have carried out less work due to supply chain disruptions.
Evidence could include accounts, confirmation of Covid-19 related loans, or dates of business closures due to lockdown restrictions.
You aren’t eligible to claim if the only impact on your business is increased costs. For example, if you had to purchase face masks and cleaning supplies – this would not be considered as reduced demand.
How much will I get?
Under the self-employed income support scheme (SEISS), the government will cover 80% of your trading profits over three months.
Previously, self-employed workers were only set to receive government grants worth 40% of average monthly profits from November through to January 2021.
The latest grant was set to be worth £3,750 but was increased to £5,160 early in November.
It meant self-employed workers would have received 55% of trading profits for the next three months – including 80% of trading profits in November.
But then, Mr Sunak increased it to 80% of trading profits for November to January – up to a maximum of £7,500.
The government has also announced there’ll be a fourth grant covering February to April 2021, but it’s yet to confirm the details including how much it’ll be.
You don’t have to repay the grants if you’re eligible, but it will be subject to income tax and self-employed national insurance.
Self-employed workers who are struggling can receive the payout as well as claim Universal Credit, but it will be classed as income and may affect how much you receive in benefits.
How do I apply?
You can make your claim via the Gov.uk website.
Self-employed workers will need the following info to claim:
- Self-assessment unique taxpayer reference (UTR) – if you don’t have this, find out how to get your lost UTR
- National insurance number – if you don’t have this, find out how to get your lost national insurance number
- Government Gateway user ID and password – if you don’t have a user ID, you can create one when you make your claim
- UK bank details (only provide bank account details where a Bacs payment can be accepted)
For a deep dive into the how SEISS works, we’ve put together a guide with everything you need to known about the system.
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