COVID-19: Self-Employed Income Support Scheme

Last updated 4 October 2021

On 26 March 2020, the Government announced a support package for those who are self-employed or a member of a partnership and have lost income due to the COVID-19 crisis. 

The Self-Employed Income Support Scheme (the ‘scheme’) was open to those who had annual profits of less than £50,000 and received at least half their income from self-employment.  Where the conditions outlined below were met, eligible individuals could apply for a grant payment under a total of five rounds of the scheme. All payments are subject to income tax and Class 4NICs.

There were five rounds of grants under the scheme (referred to here as SEISS 1, 2, 3, 4 and 5). 

The final round of grants, SEISS 5, covered the period from May to September  2021.  Applications for this fifth grant opened on 28 July 2021 and closed on 30 September 2021  The amount received depended upon how much your turnover had decreased in the year April 2020 to April 2021:

  • If your turnover had reduced 30% or more, the grant was worth 80% of 3 months’ average trading profits, capped at £7,500.
  • If your turnover had reduced less than 30%, the grant was worth 30% of 3 months’ average trading profits, capped at £2,850.

Below we have set out an outline of how HMRC determined eligibility, the amount receivable for all five grants, and how the claims process worked.  More information on various terms used below (e.g. trading profits, non-trading income) and FAQs covering issues such as eligibility, calculating turnover for the purposes of SEISS 5 and accounting for grants, can be found in our article COVID-19: Self-Employed Income Support Scheme: FAQs.

The ATT and CIOT held a number of free webinars on the SEISS during 2020 and 2021. You can access recording of these webinar and the slides used at the following links:

Who was eligible?

HMRC contacted individuals they believe may be eligible for SEISS grants, inviting them to claim online using the online service. For SEISS 1, HMRC provided a standalone online eligibility checker which allowed individuals, or their agents, to check if they were eligible for the scheme in advance of making a claim. This eligibility checker was withdrawn for SEISS 2 onwards, where eligibility was confirmed as part of the application process.

SEISS 1 and 2 eligibility

You could claim under the first and second rounds of the scheme if you were a self-employed individual or member of a partnership and you:

  • carry on a trade which has been adversely affected by COVID-19 (for example because you’re unable to work, or you have had to scale down/stop trading);
  • traded in the tax years 2018-19 and 2019-20;
  • submitted your self-assessment return for the tax year 2018-19 on or before 23 April 2020;
  • intend to continue trading in 2020-21; and
  • meet the profits condition (see below).

These eligibility criteria were the same for both the first and second grant. The one notable variation was in the timing of when a trade has to be adversely affected:

  • To claim the first grant, the trade must have been adversely affected by COVID-19 in the period up to and including 13 July 2020.
  • To claim the second grant, the trade must have been adversely affected on or after 14 July 2020.

Please see our article COVID-19: Self-Employed Income Support Scheme: FAQs for further information on what is meant by 'adversely affected'.

SEISS 3 eligibility

The Treasury Direction dated 24 November sets out that, in order to be eligible for the third grant, all of the same conditions had to be met as for the first and second grants. However, there were two extra conditions which also had to be met in order to be eligible for the third grant:

  • The trade must have suffered from reduced activity, capacity or demand in the period from 1 November 2020 to 29 January 2021 as a result of COVID-19; and
  • You must reasonably believe you will suffer a significant reduction in trading profits for the basis period including those months as a result.

A claim could not be made for the third grant if the reduced activity, capacity or demand was caused solely because a person was required to self-isolate, or care for someone required to self-isolate, as a result of travelling to the UK.

Please see our article COVID-19: Self-Employed Income Support Scheme: FAQs for further information on what is meant by 'reduced activity, capacity or demand' and 'significant reduction in trading profits'.

SEISS 4 and 5 eligibility

In order to qualify for the fourth and fifth grants, you must:

  • carry on a trade which has been adversely affected by COVID-19 (for example because you’re unable to work, or you have had to scale down/stop trading);
  • have delivered a tax return for all relevant years (including 2019-20) on or before 2 March 2021;
  • traded in the tax years 2019-20 and 2020-21;
  • intend to continue trading in 2021-22; and
  • meet the profits condition (see below).

Your trade also has to have suffered from reduced activity, capacity or demand as a result of COVID-19 in the period from

  • 1 February 2021 to 30 April 2021 (for SEISS 4)
  • 1 May 2021 to 30 September 2021 (for SEISS 5)

and you must reasonably believe you will suffer a significant reduction in trading profits for a basis period (or periods) including those months as a result.

​The profits condition

The profits condition is a key condition for all SEISS grants to date.  However, it operated slightly differently for SEISS 4 and 5.

The profits condition for SEISS 1, 2 and 3

The profits condition was met for the purposes of grants one to three if you met any of the following three tests:

1. For tax year 2018-19, your trading profits were:

          a) greater than nil, but no more than £50,000, and
          b) at least equal to your non-trading income for the year.

2. You traded in each of tax years 2016-17, 2017-18 and 2018-19 and:

          a) your average trading profits for those years were greater than nil, but no more than than £50,000, and
          b) the total of those profits was at least equal to your non-trading income for those years.

3. You traded in tax years 2017-18 and 2018-19, but not 2016-17, and

         a) your average trading profits for the tax years 2017-18 and 2018-19 were greater than nil, but no more than £50,000, and
         b) the total of those profits was at least equal to your non-trading income for those tax years.

For example, if a taxpayer had the following profits and income:

  2016-17 2017-18 2018-19 Average Total
Trading profit / (loss) £50,000 £50,000 (£10,000) £30,000 £90,000
Non-trading income £15,000 £15,000 £15,000 N/A £45,000

They would not meet the first test, as their trading profits are not greater than nil in 2018-19.

However, they would still eligible for the scheme as they would meet the second test because:

  • their average taxable profit for the three years of £30,000 does not exceed £50,000; and
  • the sum of their trading profits for the three years is £90,000, which is at least equal to the sum of their other income (£45,000) for those years.

Please see our article COVID-19: Self-Employed Income Support Scheme: FAQs for further information on what constitutes ‘trading profits’, ‘average trading profits’ and ‘non-trading income’ for these purposes.

As set out in HMRC guidance, different rules apply for individuals who are subject to the loan charge.

Special rules also apply if an individual would not otherwise qualify for the scheme due to the effect on their trading profits and other income in the 2018-19 tax year of:

The profits condition for SEISS 4 and 5

The profits condition operated slightly differently for the fourth and fifth SEISS grants, as tax returns for 2019-20 were taken into account (provided they were submitted by midnight on 2 March 2021).  

HMRC looked first at trading profits in tax-year 2019-20 to see if these were:

  • greater than nil, but no more than £50,000, and
  • at least equal to your non-trading income for the year.

If this was not the case, then HMRC looked at the overall position in up to four previous tax years (in a similar way to the three-year lookback operated for the first three grant) to determine whether:

  • your average trading profits for those years were greater than nil, but no more than £50,000, and
  •  the total of those profits was at least equal to your non-trading income for those years.

The exact years HMRC looked at will depend upon the years you traded in:

  • If you traded in 2016-17, 2017-18, 2018-19 and 2019-20 HMRC will look at average / total profits across all four years
  • If you traded in 2017-18, 2018-19 and 2019-20, but not 2016-17. HMRC will look at average / total profits across the three years 2017-18 to 2019-20.
  • If you traded in 2018-19 and 2019-20 but not 2017-18, HMRC will look at average / total profits across the two years 2018-19 and 2019-20.

As with previous grants, special rules applied to taxpayers affected by the loan charge, or where an individual would not otherwise qualify for the scheme due to the effect on their trading profits and other income in the 2019-20 tax year of military reservist activities, or having a child.

Who wasn’t eligible?

You were not eligible for a SEISS grant if any of the following applied:

  • You started your trade after 5 April 2019 (for the purposes SEISS 1 to 3) or 5 April 2020 (for SEISS 4 and 5).
  • You did not submit your 2018-19 tax return by 23 April 2020 or, for SEISS 4 and 5, you did not submit your 2019-20 tax return by 2 March 2021.
  • Your trading income forms less than half of your total income (for example, your main income comes from employment, which you top up with a smaller amount from self-employment).
  • You are a director of a limited company (though you may be eligible for some support under the Job Retention Scheme).
  • You operate a Furnished Holiday Letting business.
  • You are operating a trade through a trust.

Other points to note:

  • In calculating eligibility and the amount which can be claimed, HMRC did not take into account:
    • for SEISS 1 to 3 - any 2018-19 self-assessment returns submitted after 23 April 2020
    • for SEISS 4 and 5, any tax returns (including 2019-20) submitted after 2 March 2021.
  • Claims for SEISS 1 to 3 based on late 2018-19 returns submitted between 26 March and 23 April 2020 were subject to additional anti-fraud checks.
  • For the purposes of SEISS 1 to 3, if you amended a submitted 2018-19 return after 26 March 2020 any changes were not taken into account when working out your eligibility or amount of the grant.
  • For the purposes of SEISS 4 and 5, any tax return amendments made on or after 3 March 2021 were not taken into account by HMRC when working out your eligibility or amount of the grant.
  • For the purposes of SEISS 4, amd 5 If you amend a return on or after 3 March 2021 which would have resulted in you no longer being eligible for a grant you have received, or your grant being lower, you will have to pay back the excess amount of the grant to HMRC.  The only exception is where your original SEISS grant was £100 or less, or the amount you would have to repay is £100 or less.
  • The scheme was open to non-residents, and those claiming the remittance basis, but they were required to certify that their trading profits were at least equal to their other worldwide income (including overseas income) for any relevant tax years.
  • Grants under the scheme are not counted as ‘access to public funds’ and could therefore be claimed under all categories of work visa.

How much were grants worth?

The level of the first four SEISS grants was as follows:

  • SEISS 1 was calculated as 80% of average trading profits for a three-month period, subject to an overall cap of £7,500.
  • SEISS 2 was calculated as 70% of average trading profits for a three-month period, and capped at £6,570.
  • SEISS 3 was calculated as 80% of average trading profits for a three-month period, and capped at £7,500
  • SEISS 4 was calculated at 80% of average trading profits for a three-month period, and capped at £7,500.

The value of SEISS 5 depended on how much your turnover was reduced in the year April 2020 to April 2021 compared to either 2019-20 or 2018-19:

  • If your turnover reduced by 30% or more - 80% of 3 months’ average trading profits, capped at £7,500.
  • If your turnover reduced by less than 30% - 30% of 3 months’ average trading profits, capped at £2,850.

If you started trading in 2019-20 and did not trade in any of the tax years 2016-17 through 2018-19 (and were therefore unable to compare your turnover in April 2020 to April 2021 to that in a full prior year), your grant was set at 80% of 3 months’ average trading profits, capped at £7,500.

Please see our Self-Employed Income Support Scheme: FAQs for further information on how the turnover test worked for SEISS 5.

With the exception of SEISS 5, there was no link between the amount of grant received and the level of income lost by the trade due to COVID-19.

Calculating SEISS 1 to 3

The calculation of SEISS grants 1 to 3 was based upon submitted tax return data for 2016/17, 2017/18 and 2018/19.

Example 1

An individual had the following trading profits:

  • 2016-17 - £25,000
  • 2017-18 - £20,000
  • 2018-19 - £24,000

The first grant was calculated as follows:

  • Average annual profits - (£25,000 + £20,000 + £24,000)/ 3 = £23,000
  • Pro-rated for the three-month period is £23,000 x 3/12 = £5,750
  • 80% of £5,750 = £4,600

As this amount is below the overall cap of £7,500, the £4,600 would be payable in full.

The second grant was calculated as follows:

  • Average annual profits - (£25,000 + £20,000 + £24,000)/ 3 = £23,000
  • Pro-rated for the three-month period is £23,000 x 3/12 = £5,750
  • 70% of £5,750 = £4,025

As this amount is below the overall cap of £6,750, the £4,025 would be payable in full.

The third grant was calculated as follows:

  • Average annual profits - (£25,000 + £20,000 + £24,000)/ 3 = £23,000
  • Pro-rated for the three-month period is £23,000 x 3/12 = £5,750
  • 80% of £5,750 = £4,600

As this amount is below the overall cap of £7,500, the £4,600 will be payable in full.

Example 2

An individual had the following trading profits:

  • 2016-17 - £50,000
  • 2017-18 - £36,000
  • 2018-19 - £45,000

The first grant was calculated as follows:

  • Average annual profits - (£50,000 + £36,000 + £45,000)/ 3 = £42,000
  • Pro-rated for the three-month period is £42,000 x 3/12 = £10,500
  • 80% of £10,500 = £8,400

As this is above the overall cap, only £7,500 would be payable.

The second grant was calculated as follows:

  • Average annual profits - (£50,000 + £36,000 + £45,000)/ 3 = £42,000
  • Pro-rated for the three-month period is £42,000 x 3/12 = £10,500
  • 70% of £10,500 = £7,350

As this is above the overall cap of £6,570, only £6,570 will be payable.

The third grant was calculated as follows:

  • Average annual profits - (£50,000 + £36,000 + £45,000)/ 3 = £42,000
  • Pro-rated for the three-month period is £42,000 x 3/12 = £10,500
  • 80% of £10,500 = £8,400

As this is above the overall cap of £7,500, only £7,500 would be payable.

Calculating SEISS 4 and 5

The calculation of SEISS 4 amd 5 was similar to that for SEISS 1 to 3, but based upon submitted tax return data for 2016/17, 2017/18, 2018/19 and 2019/20.

For example, if an individual had the following trading profits:

  • 2016-17 - £25,000
  • 2017-18 - £20,000
  • 2018-19 - £24,000
  • 2019-20 - £25,000

The fourth grant was calculated as follows:

  • Average annual profits - (£25,000 + £20,000 + £24,000 + £25,000)/ 4 = £23,500
  • Pro-rated for the three-month period is £23,500 x 3/12 = £5,875
  • 80% of £5,875 = £4,700

The fifth grant was calculated as follows:

  • Average annual profits - (£25,000 + £20,000 + £24,000 + £25,000)/ 4 = £23,500
  • Pro-rated for the three-month period is £23,500 x 3/12 = £5,875
  • If turnover had reduced by 30% or more the grant = 80% of £5,875 = £4,700
  • If turnover had reduced by less than 30% the grant = 30% of £5,875 = £1,763

See our Self-Employed Income Support Scheme: FAQs for more on what constitutes turnover, trading profits, and how average trading profits were calculated for these purposes.

How could claims be made?

Claims for all SEISS grants are now closed:

  • Claims for the first grant opened on 13 May and closed on 13 July 2020.
  • Claims for the second grant opened on 17 August and closed on 19 October 2020.
  • Claims for the third grant opened on 30 November 2020 and closed on 29 January 2021.
  • Claims for the fourth grant opened in late April 2021 and closed on 1 June 2021.
  • Claims for the fifth grant opened on 27 July 2021 and closed on 30 September 2021. 

Claims should have been made using the online claims portal. Those who were unable to claim online could call the dedicated SEISS helpline to make their application.

In order to make a claim individuals needed all of the following information:

  • Your self-assessment Unique Taxpayer Reference (UTR) number;
  • Your National Insurance number;
  • Your Government Gateway user ID and password; and
  • Details of the bank account you want the grant to be paid into.

For SEISS 5, claimants also needed to calculate their turnover for:

  • a 12-month period starting between 1 April 2020 and 6 April 2020; and
  • either 2019-20 or 2018-19.

The exception to this was where an individual started trading in 2019-20 and did not trade in any of the years 2016-17 through 2018-19, when no turnover figures had to be provided.

See our Self-Employed Income Support Scheme: FAQs for further information on how the turnover test worked for SEISS 5.

Although agents could help their clients check eligibility, the actual claim could not be made by an agent – the taxpayer had to make the claim personally.  If an agent claimed on behalf of their client this triggered a fraud alert which delayed payment. Tax agents could however help or support the taxpayer in claiming.

You should have been told straight away if your claim was approved, how much you were eligible for and how this had been calculated, with payment following within six working days.  Payment was by way of a single instalment directly into your bank account. If you did not agree with the amount HMRC had calculated, you were advised to complete your claim anyway and then ask HMRC for a review. For the first round of grants HMRC provided an online form which individuals and their agents could use to request a review. This form was withdrawn for the second and subsequent rounds, and reviews could only be requested by contacting HMRC. 

You must keep a record of the amount claimed, your claim reference number and evidence that your business has been adversely affected by coronavirus.

Please note that claims were dealt with through GOV.UK only – any texts, calls or emails purporting to be from HMRC asking you to click a link or provide personal information were likely to be a scam.

More information

You can find more information on the various terms used above (e.g. trading profits, non-trading income) and answers to frequently asked questions on the scheme in our article COVID-19: Self-Employed Income Support Scheme: FAQs.

You can find more details on GOV.UK regarding:

The Treasury Directions providing the legislative basis for the scheme can all be found here.

Legislation included in s102 and Schedule 15 of Finance Act 2020 addresses reporting SEISS 1 to 3 grants for tax purposes and HMRC recovery and penalty powers.

Further provision in relation to the reporting of SEISS 4 and 5 grants and HMRC recovery and penalty powers can be found in clause 32 of Finance Act 2021.

Further support available in Scotland, Wales and Northern Ireland

The SEISS was a UK wide scheme, meaning it was available in all four nations.  However, the devolved administrations also set up additional schemes for eligible businesses in those countries.  These included schemes specifically for the newly self-employed and company directors, who would not normally qualify for the SEISS.

You can find more information on this additional support at the following links: