Self-Employment Income Support Scheme

The Self Employment Income Support Scheme (SEISS) has closed. The last date for making a claim was 30 September 2021.

On this page we provide an overview of each of the five SEISS grants with links to HMRC’s guidance and factsheets, and the legislation underpinning the scheme. We also provide a Q&A on various compliance and eligibility aspects of the scheme.

First grant

On 26 March 2020, the Chancellor announced that the Government would provide support to self-employed workers in the form of a cash grant of 80% of their profits, up to £2,500 per month for three months. This was to be known as the Coronavirus (COVID-19) Self-employment Income Support Scheme (SEISS). Applications for the first grant closed on 13 July 2020.

Second grant

On 29 May 2020, the Chancellor announced that the SEISS would be extended with those eligible able to claim a second grant from 17 August 2020. The grant was worth 70% of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total. Applications for the second grant closed on 19 October 2020.

Third grant

The third grant covered a three-month period from 1 November 2020 until 29 January 2021. It was worth 80% of average monthly trading profits paid out in a single instalment covering three months’ worth of profits and capped at £7,500 in total. Applications for the third grant closed on 29 January 2021.

Fourth grant

The fourth grant covered the three-month period from February to April 2021. Details were announced by the Chancellor at the Budget on 3 March 2021 – see here. It was worth 80% of three months’ average trading profits, paid out in a single instalment, capped at £7,500.

Unlike the first three grants, the fourth grant took into account 2019/20 tax returns and was open to those who became self-employed in tax year 2019/20. Eligibility was based on 2019/20, or the four year period spanning 2016/17 to 2019/20. You must have submitted your 2019/20 return to HMRC by 2 March 2021 to be eligible.

The value of the grant was based on an average of trading profits for up to four tax years ending 2019/20. Applications for the fourth grant closed on 31 May 2021.

Fifth and final grant

The fifth and final grant covered the impact of coronavirus from May to September 2021. Like the fourth grant it took into account 2019/20 tax returns and was open to those who became self-employed in tax year 2019/20. Eligibility was based on 2019/20, or the four year period spanning 2016/17 to 2019/20. You must have submitted your 2019/20 return to HMRC by 2 March 2021 to be eligible for it.

For the fifth grant a new additional turnover test was introduced. If you were eligible for the fifth grant, the amount of the grant was determined by how much turnover had been reduced in the year April 2020 to April 2021.

The grant was worth 80% of three months’ average trading profits, capped at £7,500, for those with a higher reduction in turnover (30% or more). For those with a lower reduction in turnover, of less than 30%, then the grant was worth 30% of three months average trading profits, capped at £2,850.

Applications for the fifth grant closed on 30 September 2021.

HMRC guidance

Some of HMRC’s guidance was withdrawn on 1 October 2021 after applications for the fifth grant closed, but it will remain available to view on GOV.UK for the foreseeable future. The withdraw guidance still on GOV.UK is as follows:

Guidance on how to use the scheme, including who could claim and the amount of grant payable, is here.
Guidance on how to claim a grant is here.
Guidance on how to work out your total income and taxable profits for the scheme is here.
For how your trading conditions affect your eligibility for the scheme, and what is meant by reduced demand or temporary closure and some examples of how this could affect your eligibility – see here.
Guidance on how to work out your turnover so you can claim the fifth SEISS grant – see here.
Guidance on different circumstances, such as for late returns, partners in a partnership, those who have loans covered by the loan charge, those on parental leave, military reservists, non-residents, those claiming averaging relief and those near or above the state aid limits, is here.

Withdrawn guidance for the first four grants is available to read on the National Archives website, see here.

Current guidance on GOV.UK is as follows:

Guidance on how to check if you need to change your 2020/2021 Self Assessment tax return for SEISS payments, and how to do it – see here.
Guidance on how to tell HMRC if you made a claim in error because you were not eligible for the grant, have been overpaid or would like to make a voluntary repayment is here.

Factsheets

HMRC’s factsheet CC/FS47 gives more information about assessments and penalties in relation to grant overpayments.

HMRC’s factsheet CC/FS11a provides information about when HMRC might charge penalties for a failure to notify an Income Tax charge relating to an overpayment of a coronavirus support payment, including under the SEISS.

Legislation

HMRC has published 7 Treasury Directions under Sections 71 & 76 of the Coronavirus Act 2020 which set out the legal framework for the SEISS here.

Legislation to introduce rules on how SEISS grants are taxed is in Schedule 16 Finance Act 2020 – see here – as amended by section 32 Finance Act 2021 – see here. The legislation also gives HMRC powers to recover payments to which recipients were not entitled to, and to charge a penalty in cases of deliberate non-compliance.

Further information

An explainer about the scheme can be found on the CIOT’s Low Incomes Tax Reform Group’s website and also on the ATT website.

Query	Response
Compliance Aspects
Are the grants taxable?	Yes, the grants are taxable. They are subject to both Income Tax and Class 4 National Insurance Contributions.
When are the grants taxable (in which tax year)?	The grants are taxable in the tax year they are received. This means that the first three grants are taxable in the tax year 2020/21. They should be reported in full on your 2020/21 self-assessment tax return. Specific boxes are provided on the form for them. You must use the specific boxes provided. Do not report your grant(s) in any other box(es). No part of the grants should be reported on your tax return for the tax year 2019/20. The fourth and fifth grants are taxable in the tax year 2021/22 and should be reported on your 2021/22 self-assessment return in due course.
What should I do if I have not correctly reported the grant(s) I received (or not reported them at all) on my 2020/2021 self- assessment tax return?	HMRC will make an adjustment to your return if the amount of the grant(s) you reported does not match their records, you received a grant but have not reported it on your return or you did not submit a self-employment or partnership page with your return. What you need to do depends on your circumstances – for further information about what you need to do see HMRC’s guidance here.
What should I do if I claimed the grant but I wasn’t actually eligible for it, or if I’ve received more from HMRC than I was entitled to?	You must tell HMRC if, when you made the claim you: - were not eligible for the grant - received more than HMRC said you were entitled to When you must tell HMRC depends on the date you received your grant. If you received the grant: - before 22 July 2020 you must tell HMRC on or before 20 October 2020 - on or after 22 July 2020 you must tell HMRC within 90 days of receiving the grant If you do not you may have to pay a penalty. Further information about assessments and penalties is in HMRC’s Factsheet CC/FS47. HMRC have provided an online form to notify and repay some or all of the grant. When you’ve completed the form, you’ll be given bank details to pay back the grant. You should print or save this page so you can make the payment. If you’re unable to use the online facility you should contact HMRC for help. HMRC are contacting people who they think were not eligible to claim the SEISS because they told HMRC on their tax return that they stopped trading in either the tax year 2018/19 or 2019/20. If you receive an email or letter from HMRC asking you to review your grant application, you should follow the instructions in the email or letter and respond to HMRC by the deadline provided – for further information see here.
If I claimed the grant but I wasn’t actually eligible for it, what is the penalty position if I submitted my 2020/21 tax return by 28 February 2022 (rather than 31 January 2022)?	If you have not yet told HMRC about overpaid SEISS grants (ie those you were not entitled to receive) you must declare those received from 6 April 2020 to 5 April 2021 on your 2020/21 tax return. If you submit your return by 28 February 2022, instead of 31 January 2022, you will not be charged a penalty unless there is a deliberate failure to tell HMRC about a SEISS grant overpayment. More information about penalties for failure to notify SEISS grants is available in HMRC’s factsheet CC/FS11a.
I have decided that I would like to voluntarily repay some or all of the grants I received even though I was eligible to receive it when I made my claim.	You can voluntarily pay back some or all of the grant you received. If you choose to do this, you can do so at any time – see here – using HMRC’s online form. When you’ve completed the form, you’ll be given bank details to pay back the grant. You should print or save this page so you can make the payment. If you’re unable to use the online facility you should contact HMRC for help.