Coronavirus: Self-Employment Income Support Scheme (SEISS)

Updated on 29 September 2020

The coronavirus (COVID-19) outbreak is having far-reaching financial impacts on individuals and businesses across the UK, and indeed across the world. The government is providing support for the self-employed in the UK under the Self-Employment Income Support Scheme. 

self employed calculator finances
(c) Shutterstock / bleakstar

⚠️ We are working hard to ensure this guidance is up to date – however, you should bear in mind that things may change as the Government respond to the ongoing situation.

What is the Self-Employment Income Support Scheme (SEISS) and can I use it?

This scheme was originally set up by the government to provide support for those who are self-employed, either as a sole trader or a partner in a partnership, and who have been trading during part of the 2018/19 tax year. You have been trading if you have been running a business selling goods or services and you complete self-employed or partnership pages as part of your Self Assessment tax return.

On 1 July 2020, the scheme was extended to provide payments to certain self-employed individuals (or partners in partnerships) who did not originally qualify based on their trading profits or total income in 2018/19 because they had parental responsibilities or were a military reservist.

Two SEISS grant payments are available under the scheme, for different amounts. You must consider your eligibility and apply for each one separately. You can only claim the SEISS grant if you meet the relevant eligibility conditions when you apply. If you claim both grant payments, you will need to consider these each time you apply.

The claim windows for each grant are as follows:

 

The first grant 

(if your business has been adversely affected on or before 13 July 2020)

The second grant 

(if your business has been adversely affected on or after 14 July 2020) 

Individuals in scope of the extended rules for those with parental responsibilities or military reservists 17 August 2020 to 19 October 2020 17 August 2020 to 19 October 2020
Everyone else The claim window closed on 13 July 2020 17 August 2020 to 19 October 2020 


If you meet the eligibility conditions to claim the SEISS grants you can still work in your business or do other work such as new employment or volunteering.

On 24 September an extension to the SEISS scheme was announced to help those eligible for the original two SEISS grants who are actively trading and have reduced demand because of the coronavirus outbreak. This extension is in the form of two additional grants for the self-employed (or individual partners in partnerships). The first of these extension grants will cover the three-month period from 1 November to 31 January 2021 and the second extension grant will cover the three-month period from 1 February 2021 to 30 April 2022.


⚠️ Be careful of fraudsters pretending to be HMRC or the government and requesting your bank account details. You will be asked to access the SEISS and provide your contact and bank details only through GOV.UK.


Who is eligible for SEISS?

⚠️ Note: SEISS is not available for people who work through their own companies and so receive wages through the PAYE system and/or dividends, see our guidance for employees.

In order to be eligible for either grant under SEISS, all of the following must apply (please note that when we refer to self-employed this includes a partner in a partnership and when we refer to self-employment income/profits this includes partnership trading income/profits):

a) you submitted a Self Assessment tax return for the 2018/19 tax year, which included self-employment profits, by 23 April 2020 (see what to do if you have not submitted a return yet and exceptions for certain groups of individuals).

b) you were self-employed in the 2019/20 tax year and traded for at least part in that year

c) you intend to continue trading in this tax year (2020/21) for at least part of the remainder of the year (or would do so but for coronavirus)

d) you carry on a trade which has been adversely affected by the coronavirus. For the first grant, you needed to have been adversely affected at some point on or before 13 July 2020. This is the case even if you fall into the group of people who can claim the first grant from 17 August 2020. For the second grant, you must know that you are adversely affected at some point on or after 14 July 2020 up to the closure of claims for second grants on 19 October 2020.

e) you meet the profits test (explained below).

Our understanding is that conditions (c) and (d) are tested at the point of making a claim. Therefore, it is possible to be eligible for one grant and not the other depending on when your business has been adversely affected, or if your intention changes regarding continuing to trade.


⚠️ Please note that to qualify for the two SEISS extension grants you must be actively trading and be impacted due to reduced demand due to coronavirus in the relevant qualifying period. We will add further details as they become available.


The profits test

To decide if you meet this test, HMRC will first look at your 2018/19 tax return – unless your circumstances fall into a group of exceptions (see also our guidance on extended rules for people with parental responsibility).

You will meet the test if, for 2018/19:

  • your self-employment profits were £50,000 or less, but more than nil; and
  • your self-employment profits were equal to, or more than, your non-trading income. So if, for example, you are self-employed and an employee and your tax return shows you earn more from your employment, you will not be eligible for SEISS. (We explain what is available for employees on our page: Coronavirus: Employees: work changes).

If you do not meet the profits test based on your 2018/19 tax return, then HMRC will allow you to average profits over the 2016/17, 2017/18 and 2018/19 tax years assuming you traded in each of these years. If the average self-employment profits for these three tax years were £50,000 or less and these profits were more than 50% of your average taxable income over the period, then the profits test will be treated as met. There is an example of how this works in HMRC’s guidance and in our article Self-Employment Income Support Scheme: your common problems explained.

If you did not carry on a trade in 2016/17, then the average profits for 2017/18 and 2018/19 are used.

If you did not carry on a trade in 2017/18 but you did in 2016/17, then the 2016/17 profits are ignored. In this case you would just look at 2018/19 to see if the profits test is met.

See below for further information on what happens if you did not carry in a trade for 2016/17 and/or 2017/18.

If conditions (a) to (d) above are met but you are not sure whether you meet the profits requirements for either 2018/19 or the three years 2016/17 to 2018/19, HMRC will check your eligibility when you make the claim, or you can call the SEISS helpline.

Our article Self-Employment Income Support Scheme: your common problems explained outlines how the eligibility criteria work if you started your self-employment during the 2017/18 or 2018/19 tax year.

If you have a work visa, you are eligible to claim SEISS. A grant under SEISS does not count as ‘access to public funds’ for immigration purposes.

If after you have claimed the SEISS grants you realise you have been overpaid or should not have claimed the grant(s) at all because you do not meet all the eligibility conditions, see below: What happens if I realise I was not entitled to claim or that I have been overpaid?

We also provide guidance below if you want to voluntarily pay back some of the grant, even if you were entitled to it.

What does adversely affected mean?

You need to consider whether your business has been adversely (negatively) affected before you apply for the SEISS grants. You need to confirm that your business has been adversely affected as part of the claim process.

HMRC’s guidance contains examples of why your business could be adversely affected. These include if you have not been able to work for periods of time due to self-isolating, shielding or as a consequence of caring responsibilities caused by coronavirus, or if your business has had to temporarily close or scale down due to lockdown, making your workplace ‘COVID secure’, staff shortages, or a lack of customers.

HMRC’s guidance states that you should consider whether your business has been adversely affected by a particular date (see the bullet points below) when applying for the SEISS grants.

For the first SEISS grant, HMRC guidance states that you should consider whether your business had been adversely affected by 13 July 2020. This was the last day you could claim the first grant, unless you fall under the extended rules for those with parental responsibilities and military reservists, in which case you can claim the first grant from 17 August 2020. For these individuals, you must still consider whether or not your business has been adversely affected on or before 13 July 2020 for the first grant, and on or after 14 July 2020 for the second grant.

For the first SEISS grant, HMRC guidance states that you should have considered whether your business had been adversely affected by 13 July (which was the last day you could claim the first grant).

For the second SEISS grant, HMRC guidance states that you should consider whether your business has been adversely affected on or after 14 July and when you make your claim for the second grant (you can apply for the second grant from 17 August 2020 to 19 October 2020).

HMRC have included some examples on GOV.UK to illustrate how they are interpreting the ‘adversely affected’ condition.

Therefore, it may be the case that your business was adversely affected earlier on in the coronavirus outbreak but then your trading patterns resumed as normal, so although you claimed the first grant you might not – according to HMRC’s guidance – pass the adversely affected condition to claim the second grant.

Also, you do not need to have claimed the first grant to claim the second grant, for example, your business may have been adversely affected by coronavirus more recently.

If you have two or more trades, then it may be the case that one of your trades has been adversely affected but your other business has carried on as usual. In this case you should still be able to claim the SEISS grants (as long as you meet the other eligibility conditions). Your grant payment will be calculating using your profits from all trades added together, even if only one of them has been adversely affected.

You will be expected to keep business records to show how your business has been affected and that you are eligible to claim the grant.

Will I still be eligible if I have taken a break from my self-employment due to maternity or adoption leave since 6 April 2019?

If you are taking a break from your self-employment because of pregnancy, a new baby or adoption, or have had a break for this purpose since 6 April 2019, HMRC will treat you as still trading throughout the period and so you will remain eligible for one or both SEISS payments if all the eligibility criteria above are otherwise met.

If taking such a break affected your trading profits or total income for 2018/19 such that you were not entitled to a SEISS grant at all under the original rules, you may be able to claim under the extended rules explained in our ‘parental extension’ guidance.

I am not sure what my self-employed profits are: where can I find this?

Note: reference below to box numbers on the Self Assessment tax return is to the self-employment (short) pages.

Your self-employed profits are the trading profits shown on your tax return (usually in box 28). It is the difference between the turnover – that is, trading income (usually the box 9 figure on the tax return) and the expenses you are allowed to deduct for tax purposes, which includes capital allowances such as the Annual Investment Allowance.

You can find out more about working out taxable profits on our website. Any trading losses from a different tax year which are used to reduce taxable profits in either 2016/17, 2017/18 or 2018/19 are ignored for this purpose.

If your allowable expenses are more than your income, you will have a trading loss for the tax year rather than a taxable profit. The way this is dealt with for the purpose of SEISS is explained below in the section What if I have made a trading loss in one of the three tax years 2016/17 to 2018/19?

If you have more than one self-employment, you must add together the trading profits and losses for all self-employments to work out your overall trading profits. See the Example in HMRC’s guidance which shows how this works.

What is my non-trading income?

Your non-trading income is the total of all your:

  • income from earnings
  • overseas income
  • property income (that is, rental profits)
  • dividends
  • savings income
  • pension income (including the taxable part of any lump sums)
  • miscellaneous income (including taxable social security income)

Please note that tax credit and universal credit payments are NOT taxable social security income. See our section on state benefits if you are not sure whether your social security income is taxable.


⚠️ These figures will be on your tax return and will also show on the online tax calculation for the particular tax year or on the SA302 tax calculation if you received a paper calculation from HMRC.


There is additional information on GOV.UK if you: prepare your accounts using the herd basis or using averaging elections; you are not resident in the UK or chose to use the remittance basis; or you have loans covered by the loan charge and have not agreed a settlement with HMRC before 20 December 2019.

What will I receive from the first SEISS grant?

⚠️ A note about the tax treatment of SEISS grants: Both grants will be subject to both income tax and Class 4 National Insurance contributions in the 2020/21 tax year. You might find our press release warning of the tax consequences of interest, as you will need to factor in these charges on the grant if estimating your Self Assessment bill for 2020/21 and budget accordingly.

HMRC should have contacted you directly if they consider you are eligible for the first grant payment under the scheme to advise you to apply for the taxable grant using an online claim form on GOV.UK.

The first grant is based on 80% of your average monthly profits from self-employment for the 2016/17, 2017/18 and 2018/19 tax years. The grant will be subject to both income tax and Class 4 National Insurance contributions.

There is a monthly maximum limit of £2,500 and this first grant will cover three months.

If you are unable to claim online, you should contact HMRC using their SEISS helpline. Make sure you have your National Insurance number and ten-digit Self Assessment Unique Taxpayer Reference (UTR) to hand before you call.


⚠️ The claim process for the first SEISS grant closed on 13 July. Other than in limited circumstances, it is no longer possible to make a claim for the first SEISS payment.


Example

Sean has self-employment trading profits for the 2016/17, 2017/18, 2018/19 tax years, he has no other income, and he is unable to work because of the coronavirus but is planning to get back to work as soon as he can. He meets all of the SEISS eligibility conditions and his trading profits for each tax year are:

  • 2016/17 tax year £20,000

  • 2017/18 tax year £23,000

  • 2018/19 tax year £29,000

HMRC contacted Sean to invite him to make a claim which he did through GOV.UK (see below) and they calculated his first SEISS grant as £4,800 which was paid directly into his bank account.

The grant was calculated as £20,000 + £23,000 + £29,000, which totals £72,000 and averages at £24,000 per tax year (that is, £72,000 divided across the three tax years).

Sean received from the government 80% of his average monthly profits of £2,000 (£24,000 divided by 12) for three months so £2,000 x 80% x 3, which is £4,800.

If Sean’s average monthly profits were higher than the example above, such as £3,500 per month the amount of the SEISS grant would have been capped at £2,500 per month. So, the maximum Sean could have received for the first SEISS grant would have been £7,500 (£2,500 x 3 months).

If you were eligible and made a claim for the first SEISS grant before the application process closed on 13 July, the payment should have been made directly into your nominated UK bank account within six working days. HMRC would have sent you an email confirming that the payment has been made.

A number of firms and organisations have produced online calculators to provide an indication of SEISS grant payments. Please note we have not checked the accuracy of these calculators and you should check your position with HMRC to confirm. For example, Deloitte has given us a link to its calculator for the first SEISS grant.

What will I receive from the second SEISS grant?

⚠️ A note about the tax treatment of SEISS grants: Both grants will be subject to both income tax and Class 4 National Insurance contributions in the 2020/21 tax year. You might find our press release warning of the tax consequences of interest, as you will need to factor in these charges on the grant if estimating your Self Assessment bill for 2020/21 and budget accordingly.

The second SEISS grant will be available to eligible self-employed claimants and the application process is open from 17 August 2020 to 19 October 2020. You may not meet all the eligibility criteria for the second grant even if you claimed the first, for example your trading position may be back to the same level as before the coronavirus outbreak.

It is possible to claim the second SEISS grant even if you did not claim the first grant. This may be because your business was not adversely affected initially but it has been adversely affected more recently.

For most claimants, the second grant is based on 70% of your average monthly profits from self-employment for the 2016/17, 2017/18 and 2018/19 tax years. Average monthly profits are calculated in the same way as for the first SEISS grant. There is a monthly maximum limit of £2,190.

See our separate guidance for differences in the calculation for those entitled to claim under the extended ‘parental responsibility’ rules, and see GOV.UK for the extension for military reservists.

Continuing the example of Sean (above)

Sean has self-employment trading profits for the 2016/17, 2017/18 and 2018/19 tax years, he has no other income, he is unable to work because of the coronavirus but is planning to get back to work as soon as he can. He meets all of the SEISS eligibility conditions and his trading profits for each tax year are:

  • 2016/17 tax year £20,000
  • 2017/18 tax year £23,000
  • 2018/19 tax year £29,000

Sean was still unable to continue his self-employment work during the summer so was eligible to make a claim for a second SEISS grant in August.

This payment will be calculated as follows:

The grant is calculated as £20,000 + £23,000 + £29,000, which totals £72,000 and averages at £24,000 per tax year (that is, £72,000 divided across the three tax years).

Sean can receive from the government 70% of his average monthly profits of £2,000 (£24,000 divided by 12) for three months so £2,000 x 70% x 3, which is £4,200.

If Sean’s average monthly profits were higher than the example above, such as £3,500 per month, the amount of the second SEISS grant would be capped at £2,190 per month. In this situation, the maximum Sean could receive for the three months would be £6,570 (£2,190 x 3 months).

What is the SEISS grant extension? 

The extension to the SEISS grant scheme was announced on 24 September. The full detail about the grants available under the extension have not been published yet and we will update this section when we have more information. 

Who is eligible for the SEISS grant extension? 

The eligibility criteria for the SEISS grant extension are: 

  • You are an individual or partner in a trading partnership who is currently eligible for the SEISS grant(s) 
  • You are currently actively trading and intend to continue to trade 
  • You are impacted by reduced demand due to coronavirus in the qualifying period (the qualifying period for the first grant extension is between 1 November and the date of claim). 

You do not need to have claimed the first and/or second SEISS grant to be able to claim the SEISS grant extension. 

How will the grant extension work? 

There will be two additional grants under the SEISS extension. 

The first one will cover the period from 1 November 2020 to 31 January 2021. The second extension grant will cover the period from 1 February 2021 to 30 April 2022.  

We are waiting for further details about eligibility rules, but HMRC have confirmed that you must declare you are impacted by reduced demand due to coronavirus in the ‘qualifying period’. The qualifying period for the first grant is between 1 November and the date of claim.  

Both of the extension grants will be subject to income tax and Class 4 National Insurance contributions, however it has yet to be confirmed in which tax year(s). 

The first grant extension (1 November 2020-31 January 2021) 

For most claimants, the first grant extension will be based on 20% of your average monthly profits from self-employment for the 2016/17, 2017/18 and 2018/19 tax years. Average monthly profits are calculated in the same way as for the first and second SEISS grants. There is a monthly maximum limit of £625, so the total maximum claim is £1,875. 

Following the example of Sean (who claimed the first and second SEISS grants) 

Sean has self-employment trading profits for the 2016/17, 2017/18 and 2018/19 tax years, he has no other income. He was unable to work between March and August because of the coronavirus but started to work from September. He meets all of the SEISS eligibility conditions and his trading profits for each tax year are: 

  • 2016/17 tax year £20,000 
  • 2017/18 tax year £23,000 
  • 2018/19 tax year £29,000 

Sean continues to trade between September and December, however his sales income (turnover) is lower than usual because of the coronavirus outbreak. Sean claims for the first grant extension. 

This payment will be calculated as follows: 

The grant is calculated as £20,000 + £23,000 + £29,000, which totals £72,000 and averages at £24,000 per tax year (that is, £72,000 divided across the three tax years). 

Sean can receive from the government 20% of his average monthly profits of £2,000 (£24,000 divided by 12) for three months so £2,000 x 20% x 3, which is £1,200. 

If Sean’s average monthly profits were higher than the example above, such as £3,500 per month, the amount of the first SEISS grant extension would be capped at £625 per month. In this situation, the maximum Sean could receive for the three months would be £1,875 (£625 x 3 months). 

See our separate guidance for differences in the calculation for those entitled to claim under the extended ‘parental responsibility’ rules, and see GOV.UK for the extension for military reservists.  

When and how you can claim the first extension grant is still to be announced by HMRC.  

The second grant extension (1 February 2021-30 April 2021) 

No further details have been published on the second extension grant because the Government have said they will review the level of the second grant and set this at a later date; we will update this section when we have more information.

What if I have made a trading loss in one of the three tax years 2016/17 to 2018/19?

If you have made a loss in one tax year, this is deducted from the profits for the other two years when working out an average profit for the three-year period. There is an Example of this in HMRC’s guidance which shows how this works.

If such a loss arose in 2018/19 because of the effect of parental responsibility on your trade and this meant you were not entitled to a grant at all under the original SEISS scheme rules, you might be able to claim under the extended rules based upon your profits for 2016/17 and 2017/18, or 2017/18 alone if you did not trade in 2016/17. Our separate guidance explains further.

What if I am receiving tax credits?

Our understanding is that HMRC’s intention is for SEISS grants to be taken into account as trading income for 2020/21 for your tax credits claim.

As the SEISS grants are taxable in the 2020/21 tax year (in all cases), our current understanding is that they will form part of your taxable profits for 2020/21. For tax credit purposes, most self-employed claimants use their taxable profit figure from their tax return when declaring income for tax credit purposes and this will include the SEISS grant, so no further adjustments should be necessary. This is because the SEISS grant will already be included in your taxable profit figure on your tax return.

However, the legislation that gives effect to this position is not clear and we still do not know exactly where on the tax return SEISS grants will be included which may affect tax credits treatment. We are trying to clarify the position with HMRC and will publish updated guidance once we have further information. In the meantime, if in doubt, you should contact HMRC tax credits helpline on 0345 300 3900 (NGT text relay for anyone who cannot hear or speak on the phone: dial 18001 then 0345 300 3900).

What if I am receiving universal credit?

Our understanding is that the grants will be treated as self-employed earnings in the universal credit (UC) assessment period that they are received. Self-employed UC claimants must send their earnings information to DWP after the end of each assessment period. 

You usually need to report payments into and out of the business in the assessment period – that includes the total amount of income your business received. Our understanding is a separate box has now been included on the online form to record the SEISS grants as self-employed income. You will also report any expenses paid out in that assessment period along with any payments of tax, National Insurance contributions and any money you paid into your pension. Although the SEISS grants are taxable, you can only deduct any tax actually paid in that assessment period for UC purposes. 

The SEISS grants will be treated as self-employed income in the assessment period that they are received and will not impact any UC received in earlier assessment periods, even if your business had been adversely affected by the coronavirus outbreak during those assessment periods. In other words, the grants will not affect past UC entitlement. 

However, it is possible that receipt of the whole amount of a SEISS grant in one UC assessment period will trigger something called ‘surplus earnings’ and as a result, it may affect your UC in subsequent assessment periods. You can read more about the surplus earnings rules via the information on our RevenueBenefits website for advisers.

What if I wasn’t self-employed or did not submit a tax return for all of the tax years on which the SEISS grants are based?

If you were not self-employed for all of the three tax years 2016/17, 2017/18 and 2018/19, or you did not submit a tax return for all three of these years, then HMRC will calculate the grant based on the submitted tax returns they have received as follows:

Circumstances Tax years used to calculate the grant payment
Traded in 2016/17, 2017/18 and 2018/19 and tax returns for these years were submitted by 23 April 2020 2016/17, 2017/18 and 2018/19
Did not trade in 2016/17, but traded in 2017/18 and 2018/19 and tax returns for these years were submitted by 23 April 2020 2017/18 and 2018/19
Did not trade in 2017/18, but traded in 2018/19 and submitted a tax return for this year by 23 April 2020 2018/19


If you traded in 2016/17 and/or 2017/18 but your tax return(s) for either or both years were not filed by 23 April 2020, then HMRC will calculate the grant on the assumption that you did not trade in the year(s) for which the tax returns are outstanding.

Note that exceptions can apply in the following circumstances:

So, in the case of Sean (see the example above), if he had only been self-employed from 2018/19 then HMRC will only look at his 2018/19 tax return.

His first SEISS grant will be calculated as follows:

  • £29,000 divided by 12 = £2,416.67
  • £2,416.67 x 80% x 3 = £5,800.

Sean’s second SEISS grant will be calculated as:

  • £29,000 divided by 12 = £2,416.67
  • £2,416.67 x 70% x 3 = £5,075.

If Sean had only started working on a self-employed basis part way through the 2018/19 tax year, the calculation of his grant would be the same. So, if his self-employment began in July 2018, his profits of £29,000 would still be divided by 12 to work out his average monthly profits even though he only traded for 9 months in that year.

What if I haven’t submitted my 2018/19 tax return yet?

Your 2018/19 tax return should have been submitted by 31 January 2020.


⚠️ If the 2018/19 return was submitted after 23 April 2020 HMRC say you will not be eligible for SEISS unless you fall into certain limited exceptions. This is understood to be a strict deadline and there are no rules that would force HMRC to accept a return after that date for SEISS eligibility purposes. However, if you feel you had a good reason for missing this extended deadline for the 2018/19 return, you could contact HMRC’s SEISS helpline to explain what happened and ask them to review your case. Remember, this is at HMRC’s discretion, so they are not obliged to allow your claim.


Filing a 2018/19 tax return after 31 January 2020 means it is a late submission and therefore HMRC will charge late filing penalties.

What if I amend my 2018/19 tax return to correct a mistake?

If you amend a 2018/19 tax return after 26 March 2020 the changes made will not be taken into account when eligibility for SEISS is considered. However, eligibility for SEISS will be based on amended details if the amendments were made before 26 March 2020.

How do enquiries affect the SEISS calculation?

If an amendment is made to your tax return after 26 March 2020 following an enquiry, this will be disregarded and the eligibility for SEISS will be based on the original return before the enquiry amendments. If there has been an enquiry and it has been closed with a contract settlement, HMRC will use the original figures on the tax return when calculating the SEISS payment.

What if my self-employment began after 5 April 2019?

Unfortunately, if you were not self-employed in the 2018/19 tax year and so did not submit a 2018/19 tax return showing any self-employed income then you are not eligible for this scheme or the extension to the scheme. You may qualify for other government support.

If you live in Scotland, Wales or Northern Ireland, you can find out whether there is any additional provision for you in our section: Coronavirus: help for businesses in Northern Ireland, Scotland and Wales.

How do I make a claim for the SEISS grant?

This depends on your circumstances. 

If you already claimed the first grant (by 13 July 2020), HMRC should contact you to invite you to make a claim for the second grant if your business continues to be adversely affected on or after 14 July 2020. However, regardless of whether or not HMRC have contacted you (by email or letter), if you meet the conditions to be eligible for the second grant then you can make a claim through GOV.UK. If you need extra support, you should contact HMRC

When HMRC contact you, or otherwise when you log-in to make a claim, you will be advised a date from which you can claim. This may be later than 17 August 2020 as HMRC need to stagger the applications. 

The deadline for claiming the second grant in all cases is 19 October 2020.

The claim process for the SEISS grant extension has not been confirmed yet.

If you did not claim the first grant because you were not originally eligible, but you fall within the extended rules for those with parental responsibility or military reservists, you are able to claim both the first and second grants from 17 August 2020 to 19 October 2020.  

If you fall into the extended rules for those with parental responsibility, you will need to ask HMRC to verify information that showed you were pregnant or had a new child before you are able to make a claim. You should do this by 5 October 2020 if possible, to allow HMRC enough time to verify the information. As part of this process, we understand that HMRC will check that you meet the eligibility conditions relating to 2017/18 (and 2016/17, if you also traded in that year). It is possible to call the SEISS helpline and ask HMRC for a review if they do not accept you meet the requirements based on the information provided. 

Once the information has been verified, you will be advised a date from which you are able to claim. You should then make a claim in the normal way through GOV.UK provided you meet the other eligibility conditions (for example, relating to the requirements on a continuing trade bring adversely affected). If you have been verified, you should have the opportunity to claim both grants during the period 17 August 2020 to 19 October 2020.  

If you fall into the extended rules for military reservists, HMRC should contact you directly and invite you to make a claim from a specified date if you meet the eligibility conditions. In this case, again, you should have the opportunity to claim both grants during the period 17 August 2020 to 19 October 2020.  

Remember that eligibility for the first grant depends on whether or not your business was adversely affected on or before 13 July 2020, whereas eligibility for the second grant depends on whether or not your business was adversely affected on or after 14 July 2020. You will need to consider you eligibility for each separately (ensuring all the other conditions are met).

What happens after I make my claim?

As part of the claim process, you will confirm that you meet all of the eligibility criteria and HMRC will explain how the grant has been calculated and what you will receive. It is important to either print or take a screenshot of the calculation of your SEISS grant and the grant claim reference.

If you think that the grant calculation is incorrect then you can request a review by calling HMRC – you will need your grant claim details and the explanation of why you do not agree with the calculation. You should still claim the grant as you can request a review afterwards and this will mean you will receive a grant payment within six working days whereas we are unsure how long the HMRC review process will take.

Keep records of the amounts received and plan for tax and National Insurance contributions on the grants

As mentioned in our press release: Self-employed grant claimants warned of tax hit, SEISS grants are chargeable to income tax and Class 4 National Insurance contributions (NIC). This means you must keep a record of how much you receive so that you can include the grants in your Self Assessment tax returns. We understand that the grants will be taxed in 2020/21, so you will need to budget for tax and NIC on them accordingly.

Keep further records

Remember it is also important to keep records detailing how your business was adversely affected by the coronavirus outbreak when you make a claim for the SEISS grants.

The records could show a reduction in your monthly business income during the coronavirus outbreak or include details of when your business premises were closed, when you were unable to work because of shielding or caring responsibilities (for example if you are home-schooling) or any business support loans you have applied for.

You might want to think about how you keep these records – particularly if your business is affected by the illness of either yourself or a family member, or caring responsibilities for children or others caused by coronavirus. It may be easiest to note the dates of these events in a diary kept for business purposes, so that these are separate from your personal records. This will mean that the information is easily available to produce should HMRC ask for it in future.

There are restrictions on information that HMRC can ask you to produce in the event of an enquiry if such information is of a personal nature, for example relating to ill-health. However, in the context of proving entitlement to SEISS, it might be reasonable for HMRC to ask you to produce records showing the impact of such ill-health on your business – such as having to stop work for a certain period.

You will also need to keep details of any ‘reduced demand’ for your business if you are claiming the SEISS grant extension payments.

What happens if I realise that I was not entitled to claim or that I have been overpaid?

If you have claimed a SEISS grant but you were not entitled to receive it, you have an obligation to notify HMRC of that fact. This might be the case if you claimed the grant but you later realised that you did not meet all of the eligibility conditions.

You have a similar obligation to notify HMRC if you have been overpaid either grant but you were nevertheless entitled to receive a smaller amount. We understand that this should be rare as HMRC will make the calculations automatically based on information submitted on your Self Assessment tax returns. However, we understand that in a number of cases HMRC have overpaid grants due to their own error and as a result they will not be seeking recovery of the overpaid amounts. If you are unsure, you should contact HMRC.

HMRC have stated that individuals do not have an obligation to check that the amount they have received is correct. However, we suggest that individuals nevertheless check the amount received so that:

  • if they have been underpaid, they query this with HMRC; or
  • if they have been overpaid, they can notify HMRC in accordance with their legal obligation to do so (though HMRC may not seek recovery of the overpaid amount if it is as a result of their own error).

Time limits for notifying HMRC

The date by which you must notify HMRC is the later of:

  • 20 October 2020, and

  • 90 days from the date you received the grant payment which was overpaid or to which you were not entitled.

For details of how to make the notification to HMRC, see GOV.UK.

You will need to pay back any amount that you had received to which you were not entitled. You can do this by direct payment to HMRC. HMRC can also make a direct assessment in order to collect the 100% tax charge.

If you have not repaid the amount by the time you come to complete your Self Assessment tax return for 2020/21, you would be liable to a tax charge as part of your 2020/21 Self Assessment liability equal to 100% of the amount of the grant(s) to which you were not entitled. This will be due on 31 January 2022.

We understand it will be possible to ask for a Time to Pay arrangement in respect of any amounts needing to be repaid.

Penalties for failing to notify HMRC

If you do not notify HMRC within 90 days, you may be charged a penalty unless the failure was not deliberate and you had a reasonable excuse. However, provided you did not know at the point of receipt of the grant that you were not entitled, or that you had been overpaid, such a penalty should be nil provided you pay any tax due by 31 January 2022.

On the other hand, if at the point you received the SEISS payment you knew you were not entitled to it, or you knew that you had been overpaid, then the penalty for failing to notify HMRC within the 90-day period could be up to 100% of the amount to which you were not entitled and had not paid back before the end of the 90-day period.

This will be in addition to the 100% tax charge on the amount to which you were not entitled, so you could in effect need to pay back double the amount you had received. Furthermore, you will not be able to argue you had a reasonable excuse for the failure to notify.

I am entitled to the SEISS grant I have received but I feel it is too much. What can I do?

We understand that some individuals feel like the SEISS grant has over-compensated them for the adverse effect their trade has suffered. This is not unusual, given that there is no minimum economic impact you must have suffered in order to qualify as ‘adversely affected’.

HMRC have responded to this by saying they will allow voluntary repayments of some or all of the grant individuals have received. Information on how to do this is on GOV.UK.

We understand from HMRC that if you do pay some of it back voluntarily, you will only be liable to income tax and Class 4 National Insurance on the ‘net’ amount that you keep. You should therefore keep a careful record of the amount you receive and any amounts repaid and ensure that only the amount you have kept is included on your 2020/21 Self Assessment tax return.

LITRG makes no comment on whether you should or should not make a voluntary repayment to HMRC in these circumstances.

Support for limited company directors

SEISS parental extension

More information on Coronavirus guidance
Information for employers Taking money from your pension
What is the Job Retention Scheme? Help with paying your tax
Employees: illness or self-isolation Information if you are a student or are repaying your student loan
Employees: work changes Accessing money in childcare schemes
Employees: universal credit and pay High Income Child Benefit Charge: What to do if your income falls?
Redundancy explained School closures: family members might be able to claim state pension ‘babysitting’ credits
Support for limited company directors Childcare support and benefits for children
Self-Employment Income Support Scheme Inheritance tax exemption
SEISS parental extension Support for Carers
Self-employment and paying tax Carer’s allowance: can you claim?
Self employment: Illness or self-isolation Volunteering and job opportunities
Self-employment: work changes Scams: please be vigilant!
Help for businesses in Northern Ireland, Scotland and Wales Dealing with HMRC during the coronavirus outbreak
Taking money from your savings Tax guides
More information on self-employment
Am I employed, self-employed or neither?

What tax allowances am I entitled to?

How do I register for tax and National Insurance?

What is the trading allowance?

What business records should I keep?

How do I pay tax on self-employed income?

Working out profits, losses and capital allowances

What National Insurance do I pay if I am self-employed?

How do I work out my taxable profits?

What is the Construction Industry Scheme (CIS)?

How do I prepare my accounts?

How do I work out my profits for universal credit?

What business expenses are allowable?

Do I have to pay VAT if I am self-employed?

Can I claim for pre-trade expenses?

What is Making Tax Digital for VAT?

What capital allowances can I claim?

Pensions and self-employment

What if I make a loss?

How do I repay my student loan if I am self-employed?

When do I make Self Assessment payments and file my tax return?

Penalties and enquiries

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