Self-employment Income Support Scheme (SEISS)

Key features

The scheme was set up by the government to provide support during the coronavirus pandemic for the self-employed – that is, sole traders or a partner in a partnership. A series of five grant payments were made available, provided certain eligibility criteria were met.

Under the scheme, you could still work in your business or do other work such as begin a new employment or volunteering work.

All SEISS grants were subject to income tax and Class 2 and 4 National Insurance contributions.

Under the headings below, we discuss the key features of the five different SEISS grants and link to further guidance where necessary. Due to the different and specific eligibility conditions for each grant, it was possible to be eligible for different grants depending on when your business had been adversely affected, or if your intention changed regarding continuing to trade.

Please note when we refer to self-employed, this includes a partner in a partnership. Similarly, when we refer to self-employment income/profits this includes partnership trading income/profits.

First grant (SEISS 1)

Claim period

13 May 2020 to 13 July 2020

Amount

80% of average profits for three months, capped at £7,500

When taxed

2020/21 tax year

Eligibility conditions

All of the following must have applied:

1. you submitted a self assessment tax return for the 2018/19 tax year, which included self-employment profits, by 23 April 2020
2. you were self-employed in the 2019/20 tax year and traded for at least part of that year
3. you intended to continue trading in the 2020/21 tax year for at least part of the year (or would have done so but for coronavirus)*
4. you met the profits test (as explained under the heading Profits test below)
5. you carried on a trade which had been adversely affected (as explained under the heading Adversely affected below) by coronavirus at some point on or before 13 July 2020*

*Conditions 3 and 5 above were tested at the point of making a claim.

Second grant (SEISS 2)

Claim period

14 July 2020 to 19 October 2020

Amount

70% of average profits for three months, capped at £6,570

When taxed

2020/21 tax year

Eligibility conditions

All of the following must have applied:

1. you submitted a self assessment tax return for the 2018/19 tax year, which included self-employment profits, by 23 April 2020
2. you were self-employed in the 2019/20 tax year and traded for at least part of that year
3. you intended to continue trading in the 2020/21 tax year for at least part of the year (or would have done so but for coronavirus)*
4. you met the profits test (as explained under the heading Profits test below)
5. you carried on a trade which had been adversely affected (as explained under the heading Adversely affected below) by coronavirus at some point in the period 14 July 2020 to 19 October 2020*

*Conditions 3 and 5 above were tested at the point of making a claim. 

Third grant (SEISS 3)

Claim period

30 November 2020 to 29 January 2021

Amount

80% of average profits for three months, capped at £7,500

When taxed

2020/21 tax year

Eligibility conditions

All of the following must have applied:

1. you submitted a self assessment tax return for the 2018/19 tax year, which included self-employment profits, by 23 April 2020
2. you were self-employed in the 2019/20 tax year and traded for at least part of that year
3. you intended to continue trading in the 2020/21 tax year for at least part of the year (or would have done so but for coronavirus)*
4. you met the profits test (as explained under the heading Profits test below)
5. adversely affected businesses must specifically have suffered reduced activity, capacity or demand (as explained under the heading Reduced activity, capacity or demand, below) in the period 1 November 2020 to 29 January 2021, compared to what could reasonably have been expected but for the adverse effect on the business of coronavirus; and have reasonably believed that they would have suffered a significant reduction (as explained under the heading Significant reduction and relevant basis periods, below) in trading profits for a ‘relevant basis period’ compared to what could reasonably have been expected were it not for the reduced activity, capacity or demand*

*Conditions 3 and 5 above were tested at the point of making a claim.

Fourth grant (SEISS 4)

Claim period

22 April 2021 to 1 June 2021

Amount

80% of average profits for three months, capped at £7,500

When taxed

2021/22 tax year

Eligibility conditions

All of the following must have applied:

1. you met the profits test (as explained under the heading Profits test below)
2. adversely affected businesses must specifically have suffered reduced activity, capacity or demand (as explained under the heading Reduced activity, capacity or demand, below) in the period 1 February 2021 to 30 April 2021, compared to what could reasonably have been expected but for the adverse effect on the business of coronavirus; and have reasonably believed that they would have suffered a significant reduction (as explained under the heading Significant reduction and relevant basis periods, below) in trading profits for a ‘relevant basis period’ compared to what could reasonably have been expected were it not for the reduced activity, capacity or demand*
3. you must have submitted your 2019/20 tax return on or before 2 March 2021
4. you must have carried on a trade in the 2019/20 and 2020/21 tax years
5. you must have intended to continue to carry on a trade in the 2021/22 tax year at the time you claimed the grant*

*Conditions 2 and 5 above were tested at the point of making a claim.

Fifth grant (SEISS 5)

Claim period

29 July 2021 to 30 September 2021

Amount

Either:

• 30% of average profits for three months, capped at £2,850, or
• 80% of average profits for three months, capped at £7,500.

Which of the above applies depends on the financial impact declaration (FID) test, or turnover test, described under the  heading Financial impact declaration, below.

When taxed

2021/22 tax year

Eligibility conditions

All of the following must have applied:

1. you met the profits test (as explained under the heading Profits test below)
2. adversely affected businesses must specifically have suffered reduced activity, capacity or demand (as explained under the heading Reduced activity, capacity or demand, below) in the period 1 May 2021 to 30 September 2021, compared to what could reasonably have been expected but for the adverse effect on the business of coronavirus; andhave reasonably believed that they would have suffered a significant reduction (as explained under the heading Significant reduction and relevant basis periods, below) in trading profits for a ‘relevant basis period’ compared to what could reasonably have been expected were it not for the reduced activity, capacity or demand*
3. you must have submitted your 2019/20 tax return on or before 2 March 2021
4. you must have carried on a trade in the 2019/20 and 2020/21 tax years
5. you must have intended to continue to carry on a trade in the 2021/22 tax year at the time you claimed the grant*

*Conditions 2 and 5 above were tested at the point of making a claim.

You can check what SEISS grants you received on GOV.UK.

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.

Profits test

The profits test had to be met for all SEISS grants, but the test was slightly different for SEISS 4 and SEISS 5 to that which was applied for the first three grants.

SEISS 1, SEISS 2 and SEISS 3

For the first three SEISS grants, to decide if you met this test, HMRC would have first looked at your 2018/19 tax return – unless your circumstances fell into a group of exceptions.

You will have met 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. For example, if you were self-employed and an employee and your 2018/19 tax return showed you earned more from your employment, you would not have been eligible for SEISS.

If you did not meet the profits test based on your 2018/19 tax return, then HMRC allowed 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 would have been treated as met.

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 the first three grants were based on the submitted tax returns HMRC had received as follows:

1. If you traded in 2016/17, 2017/18 and 2018/19 and tax returns for these years were submitted by 23 April 2020, then the 2016/17, 2017/18 and 2018/19 tax years were used to calculate the grant payments.
2. If you 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, then the 2017/18 and 2018/19 tax years were used to calculate the grant payments.
3. If you did not trade in 2017/18 (regardless of whether you traded in 2016/17), but traded in 2018/19 and submitted a tax return for this year by 23 April 2020, then the 2018/19 tax year was used to calculate the grant payments.

SEISS 4 and SEISS 5

For the fourth and fifth grants, HMRC were able to take account of profit figures on 2019/20 tax returns. The 2019/20 tax return must have been submitted by midnight on 2 March 2021.

This meant that individuals who started self-employment for the first time in 2019/20, as a sole trader or partner in a partnership, may have been eligible for grants (being SEISS 4 and SEISS 5) for the first time.

However, the inclusion of 2019/20 profit figures meant that some claimants of the previous grants received a different amount from what they are expecting. Some may not have qualified at all for SEISS 4 and SEISS 5, even if they did for the first three grants.

  The inclusion of the 2019/20 tax return information for SEISS 4 and SEISS 5 did not affect eligibility for, or the amount of, the first three SEISS grants. Also, those who started self-employment for the first time in 2019/20 were not eligible for the first three grants retrospectively.

For SEISS 4 and SEISS 5, the profits condition was met if your trading profits for 2019/20 were:

• more than nil, but less than £50,000, and
• at least equal to your non-trading income in that tax year (in other words, at least half of your income was from self-employment).

If you did not meet this condition for the 2019/20 tax year you were allowed to consider your average profits for 2019/20 and earlier tax years as follows:

Traded in 2016/17?	Traded in 2017/18?	Traded in 2018/19?	Traded in 2019/20?	Years to average for the profits condition
Yes	Yes	Yes	Yes	2016/17, 2017/18, 2018/19 and 2019/20
No	Yes	Yes	Yes	2017/18, 2018/19 and 2019/20
Either	No	Yes	Yes	2018/19 and 2019/20

There are exceptions in specific circumstances, such as new parents – see GOV.UK for more information.

Multiple trades

For all five grants, if you had more than one self-employment, you needed to 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.

Losses

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

Adversely affected

You needed to consider whether your business had been adversely (negatively) affected before you applied for a SEISS grant. You had to confirm that your business had been adversely affected as part of the claim process.

Your business could have been adversely affected for a number of reasons. These included:

• if you had 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 had to temporarily close or scale down due to lockdown, making your workplace ‘COVID secure’, staff shortages, or a lack of customers.

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 SEISS 1 and SEISS 2 you might not have been eligible to claim any further grants if you were no longer adversely affected.

Note that for SEISS 3, SEISS 4 and SEISS 5, there were additional criteria to be met. Adversely affected businesses must have:

• suffered reduced activity, capacity or demand (as explained under the heading Reduced activity, capacity or demand, below), and
• reasonably believed that they would have suffered a significant reduction (as explained under the heading Significant reduction and relevant basis periods, below) in trading profits.

For this test, it was not sufficient to have been adversely affected only by having increased costs, such as expenditure on personal protective equipment (PPE).

If you had two or more trades, it was only necessary for one of your trades to be adversely affected. Your grant payment was calculated using your profits from all trades added together, even if only one of them had been adversely affected.

In case of an enquiry by HMRC, it is important to keep business records (as mentioned under the heading Business records below) to show how your business was affected by coronavirus and that you were eligible to make a claim.

Reduced activity, capacity or demand

Reduced activity, capacity or demand means, for example, that:

• you carried out less work due to supply chain disruptions (reduced activity), or
• you were temporarily unable to trade – for example, because your business had to close, you tested positive for coronavirus and you were unable to work, or you could not work because of parental caring responsibilities (reduced capacity); or you had fewer customers or clients than you would normally have expected (reduced demand).

However, you could not make a claim for SEISS 3, SEISS 4 or SEISS 5, if your reduced activity, capacity or demand was solely as a result of having to quarantine after travelling to the United Kingdom from overseas.

Note that having increased costs – for example, the purchase of personal protective equipment (PPE) – does not, by itself, mean that you had reduced activity, capacity or demand. There must have been some impact on the amount of work you had, or on your ability to carry out that work, in order to qualify.

You can find further examples on GOV.UK.

Significant reduction and relevant basis periods

These phrases are relevant for SEISS 3, SEISS 4 and SEISS 5 grants only.

Significant reduction

For SEISS 3, SEISS 4 and SEISS 5 there was no requirement for trading profits to be reduced by a certain fixed amount or percentage, but the reduction had to be ‘significant’. HMRC said you needed to consider your individual and wider business circumstances when making this assessment.

The reduction must also have been because of the reduced activity, capacity or demand (as mentioned under the heading Reduced activity, capacity or demand, above) suffered by the business.

Any income received from coronavirus business support schemes, such as SEISS 1 and SEISS 2 and the small business grants, should not have been included when considering whether your trading profits have been significantly reduced.

Relevant basis periods

A basis period is usually 12 months. A ‘relevant basis period’ is a basis period for your business which overlapped with:

• for SEISS 3, the period 1 November 2020 to 29 January 2021
• for SEISS 4, the period 1 February 2021 to 30 April 2021
• for SEISS 5, the period 1 May 2021 and 30 September 2021

So, for SEISS 3 if your basis period ended in the period 1 November 2020 to 29 January 2021 (for example, your basis period ended on 31 December 2020), then you will have two relevant basis periods. You needed to consider whether or not you had a significant reduction in trading profits over the whole of at least one basis period, not just the period from 1 November 2020 to 29 January 2021.

However, as many self-employed businesses have an accounting year ending on 31 March or 5 April then all of their basis period ended 31 March 2021 or 5 April 2021 fell under the SEISS 3 grant period and you would need to consider the effect on your business for the period 1 November 2020 to 29 January 2021.

For SEISS 4, if your basis period ended on 31 March 2021, your relevant basis periods are:

• the basis period ended 31 March 2021, and
• the basis period beginning 1 April 2021.

In this case, you only needed to have had a reasonable belief that you would have a significant reduction of trading profits in one of the two periods.

And for SEISS 5, if your basis period ended in the period 1 May 2021 to 30 September 2021, then you will have two relevant basis periods. For example, your basis period ended on 30 June 2021, your relevant basis periods are:

• the basis period ended 30 June 2021, and
• the basis period beginning 1 July 2021.

Again, in this case, you only needed to have had a reasonable belief that you would have a significant reduction of trading profits in one of the two periods.

Financial impact declaration (FID) test

The FID was used for some fifth grant (SEISS 5) claimants only to see what level of grant they were eligible for.

If you started your self-employment or became a partner in a partnership in 2019/20 and had not been self-employed or in a partnership in any of the 2016/17, 2017/18 and 2018/19 tax years, then you did not have to complete the FID and automatically received the fifth grant calculated using 80% of three-twelfths of the profits shown on your 2019/20 tax return.

So, if you started self-employment for the first time in 2019/20, then your trading profits will be divided by 12 (irrespective of when you started trading) and then multiplied by 3 and then 80%. The figure is capped at £7,500. This is same as SEISS 4.

If you have been self-employed or a partner in a partnership at any time during the 2016/17 to 2018/19 tax years you must have completed the FID test, even if you ceased being self-employed (or being a partner) during this time and then started a new business during 2019/20.

The FID test was a comparison between turnover in the pandemic period and a reference period. We explain what these terms in bold mean below.

The level of the fifth grant depended on how much your turnover had been reduced.

If the FID test showed turnover was reduced by at least 30% then the grant you could claim was 80% of three-twelfths of your average profits shown on your tax returns, capped at a total maximum of £7,500.

If the FID test showed turnover was reduced by less than 30% then the grant you could claim was 30% of three-twelfths of your average profits shown on your tax returns, capped at a total maximum of £2,850.

If your turnover had increased in the pandemic period compared with the reference period, it was still possible to claim the fifth grant if you met all the eligibility conditions explained under the heading Key features, above. Specifically, note that you would have needed to reasonably believe that your trading profits would have been significantly reduced (as mentioned under the heading Significant reduction and relevant basis periods, above).

There is also information on the FID test on GOV.UK.

Turnover

Turnover includes the takings, fees, sales and money earned or received by the business (not including VAT if you are VAT registered). It is calculated using the accruals basis or the cash basis.

You should not have included any coronavirus business support grants such as SEISS grants or Eat Out to Help Out when calculating your turnover for the pandemic or reference periods.

If you are self-employed then turnover should be the amount you would include in either box 9 (self-employment supplementary short pages) or box 15 (self-employment supplementary full pages) when completing your self assessment tax return.

If you are in a partnership, then see our guidance under the heading Partnerships below.

The pandemic period

If you had to complete the FID to claim SEISS 5, you had to provide the turnover figures for the pandemic period as part of the claim process. The pandemic period is a 12-month period which can start from any date between and including 1 April 2020 to 6 April 2020.

For example, Mason is self-employed and prepares his accounts to 5 April. The simplest dates for him to have chosen for the pandemic period were from 6 April 2020 to 5 April 2021 and that should tie in with the information he used to prepare his self assessment tax return.

If you had a basis period which is either not 12 months or did not begin with a date from 1 April 2020 to 6 April 2020, then you would have had to have chosen a date between 1 April 2020 and 6 April 2020 then calculated your turnover for the 12-month period beginning with that date.

The reference period

The turnover in your reference period is the turnover from either:

• the submitted 2019/20 tax return, or
• the submitted 2018/19 tax return, if you reasonably believed that the 2018/19 tax year more accurately reflected the usual turnover of the business in a typical 12-month period. For example, if you were on maternity leave during the 2019/20 tax year you may have considered the turnover from your 2018/19 tax return to be a more accurate reflection of a ‘typical’ year.

If the basis period used for the reference year was longer than 12 months, then the turnover needed to be apportioned on a ‘just and reasonable’ basis so that only 12 months was used for the FID test. For example, if your basis period was 16 months long and your total turnover was £32,000 then you may have decided it was reasonable to apportion £24,000 to the pandemic period (£32,000/16 x 12 months).

However, if your basis period used for the reference year was shorter than 12 months (for example, if you started trading in the year), then the turnover was not ‘scaled up’.

Partnerships

If you are a partner in a single partnership only for both the pandemic period and 2019/20 (see below under the heading Multiple trades, if you also had another trade in either period) then you should have used the total partnership turnover figure for both the pandemic period and the reference period, regardless of your profit share in the partnership. This is the case even if you used 2018/19 as your reference period.

The turnover figure used should have been from box 3.24 or 3.29 of the SA800 partnership tax return. However, as explained above this may need to be adjusted if the basis period is not 12 months or, for the pandemic period, did not begin between 1 April 2020 and 6 April 2020.

If you joined a partnership in the pandemic period, or if you left a partnership in 2019/20, then you should have included your share of the partnership’s profit only when completing the FID test.

Multiple trades

If you have more than one self-employment (otherwise known as multiple trades) then you needed to have included the turnover from all your self-employment businesses in both the pandemic period and the reference period.

If you had more than one trade across the pandemic period and the 2019/20 tax year (not necessarily at the same time), and at least one of those trades was a partnership, then for the FID (turnover) test you should only have included your share of the turnover from each partnership (this is different to the turnover used if you are in a single partnership only – see the Partnerships heading above).

Profit-sharing percentage changes

If you are a partner in a partnership in both 2019/20 and the pandemic period and you need to consider your share of the partnership profits for the FID (turnover) test, then you should use the profit-sharing percentage which applied during the basis period for the reference period – even if the profit-sharing percentage changed in the pandemic period.

There is also information on the FID test on GOV.UK.

Tax credits

We understand that HMRC’s intention was for the first three SEISS grants to have been taken into account as trading income for 2020/21 for your tax credits claim.

As the first three SEISS grants were taxable in the 2020/21 tax year, they formed 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 (if it was completed) when declaring trading income for tax credit purposes and this would have included the SEISS grants for the relevant year, so no further adjustments to the figures should have been necessary. This is because you should already have included the SEISS grants when completing your tax return. This means they should already have been included in your taxable profit figure on your tax return and therefore would have been taken into account for tax credits.

SEISS grants 4 and 5 were taxed in the year they were received, which should have been the 2021/22 tax year and so, for tax credit purposes, they should have been included as trading income for 2021/22. For tax credits HMRC should have asked you to tell them your 2021/22 income (either an estimate or actual figures) by 31 July 2022. If you provided an estimate by 31 July 2022, you will have had until 31 January 2023 to provide the actual figure.

If you needed to provide an estimate of your 2021/22 income to HMRC because you had not completed your tax return, you should have included the value of SEISS grants 4 and 5 when estimating your income from self-employment. As above, once you completed your tax return for 2021/22, the taxable profit figure from the return should have already included the SEISS grants and therefore would not have required any adjustment for tax credit purposes.

If a SEISS grant has been paid for the wrong amount or if you were not entitled to it, you may need to repay it to HMRC, as explained on GOV.UK. If you need to repay part or all of a SEISS grant you have received, it can affect your tax credit award.

If a SEISS grant was repaid in the same tax year in which it was received then, your self assessment tax return should read as though the SEISS grant did not exist and your income for tax credits should have been unaffected. The same applies if the grant was repaid at any point before you completed your tax return (relating to the year in which you received the SEISS grant which was later repaid), providing the tax return was completed on time.

If the tax return was submitted late (after 31 January deadline), then your tax credits award will have been finalised on 31 January based on the estimated income already given to HMRC, which is likely to have included the incorrect SEISS amount. HMRC will not normally re-visit your finalised award at your request due to submitting your tax return late but claimants in this situation would need to contact HMRC to discuss the position.

If you repay a SEISS grant after you submitted your self assessment tax return, and you amend your self assessment return for tax purposes to take account of the adjustment, this may affect your tax credit award. If HMRC finalised your tax credit award using an income figure which includes an incorrect SEISS amount, you should contact HMRC’s tax credits helpline to notify them about your adjusted tax credit income figure. HMRC say they may be able to re-finalise the tax credit award using the adjusted income figure.

Universal credit

Our understanding is that the SEISS grants were treated as self-employed earnings in the universal credit (UC) assessment period that they were 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 was included on the online form to record the SEISS grants as self-employed income. You should have also reported 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 were treated as self-employment income in the assessment period that they were received and do not impact any UC received in earlier assessment periods, even if your business had been adversely affected (as discussed under the heading Adversely affected above) by the coronavirus outbreak during those assessment periods. In other words, the grants do not affect past UC entitlement.

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

If you pay back any part of a SEISS grant, our understanding is that you should report this to DWP in the assessment period you make the repayment. DWP will treat the grant repayment as a self-employed expense in the assessment period the repayment is made to HMRC.

Business records

You should keep records of the amounts received as you should have included the grants in your self assessment tax returns (as explained under the heading Tax return reporting, below).

Also, you should keep records detailing how your business was adversely affected (as discussed under the heading Adversely affected above) by the coronavirus outbreak in respect of a claim for any SEISS grant.

For SEISS 3, SEISS 4 and SEISS 5, you should also keep records to demonstrate how your business was affected by reduced activity, capacity or demand, as well as evidence to back-up your belief that you had a significant reduction in trading profits (for more information see the headings, Reduced activity, capacity or demand and Significant reduction and relevant basis periods, above). GOV.UK provides examples of the different types of evidence you need to keep if you claimed SEISS 3, SEISS 4 and SEISS 5.

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 were home-schooling) or any business support loans you applied for.

You might want to think about how you keep these records – particularly if your business was 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 the 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.

Tax return reporting

As the SEISS grants are subject to income tax and self-employed National Insurance contributions (NIC) they needed to be included on your self assessment tax returns even if you would not usually have to complete a tax return as you were claiming full relief under the trading allowance.

For the vast majority of SEISS claimants, the grants would have been included on their 2020/21 tax return (for the first three SEISS grants) and their 2021/22 tax return (for the last two SEISS grants). Unless you were a partner in a partnership which retained the SEISS grants as partnership income (see point 1 below) you should have included the SEISS grants in box 27.1 on the short supplementary self-employment (SA103S) pages and in box 70.1 on the full supplementary self-employment (SA103F) pages. Also you should have put an X in box 20.1 on page TR8 of the main tax return (SA100) to confirm you received coronavirus support payments.

This means there should be no SEISS grants included on the 2022/23 tax returns except in the following cases:

1. You are a partner in a partnership which retained the SEISS grants and allocated the grants between the partners as part of the partnership agreement and the partnership’s accounting year end means that the SEISS grant income is included in the 2022/23 tax year. For example, if the partnership’s accounting period ends on 31 July and you claimed the fifth SEISS grant in August 2021 this will be included within the partnership profit for the year ended 31 July 2022 and then on the partnership’s 2022/23 tax return. You may want to explain in the additional information section on your tax return that the partnership has distributed your SEISS grants within the partnership and it is included within your share of the profits from the partnership.
2. A very small number of SEISS claimants received their SEISS grants later than usual and need to include these grants on their 2022/23 tax return. HMRC will contact these claimants directly explaining where the SEISS grants need to be included on the tax return as the SEISS box included in the 2020/21 and 2021/22 tax returns has been removed from the 2022/23 tax return.

If you fall under the scenario 2 above, then if you are completing a paper tax return then you will have to use the full supplementary self-employment (SA103F) pages (and not the short self-employment pages) and include your SEISS grants in the ‘averaging adjustment’ box 72. You should also include details of the SEISS grants included in the 2022/23 tax return in the ‘any other information’ box 19.If you are completing your tax return using HMRC online services, you should include the 2022/23 SEISS grants in the ‘averaging adjustment’ box in the self-employment section and include details of the SEISS grant payments in the ‘any other information’ box.

It may be the case that you have submitted your 2021/22 tax return but now realise you have got the entries relating to the SEISS grants wrong.

If you have submitted your 2021/22 tax return and your SEISS grants were not included in the correct box, then HMRC should have automatically amended your tax return to include the amount of the SEISS grants per their records and sent you a revised tax calculation (form SA302). The form SA302 should explain the changes made to the figures you have submitted. When you received the revised tax calculation you should have checked that it is correct as you only had 30 days from the date of the SA302 letter to contact HMRC to let them know you disagreed with their amendments.

If you know that your 2021/22 tax return is incorrect for the SEISS grants and HMRC have not contacted you, then you should amend your tax return yourself (see Amending tax returns below) as soon as possible to correct the mistake. You should contact HMRC for help if you are not sure how to do this.

If you have received a form SA302 amending your tax return for SEISS grants you never claimed then you should contact HMRC as soon as possible.

Amending tax returns

SEISS 1 to 3

If you amended a 2018/19 tax return after 6pm on 26 March 2020, the changes made would not have been taken into account when eligibility for the first three SEISS grants was considered.

However, any amendments made before 26 March 2020 would have been taken into account for the first three grants.

SEISS 4 and 5

If you amend your tax return(s) for any of the 2016/17 to 2019/20 tax years on or after 3 March 2021 this may mean that you have to pay some or all of the SEISS 4 and/or SEISS 5 grants back if the amendment either:

• reduces the amount of the fourth or fifth grant you would have been entitled to claim (this includes reducing the level of the SEISS 5 grant using the FID test (as explained above under the heading Financial impact declaration (FID) test above) from 80% to 30%), or
• means you would not have been eligible to claim at all.

However, if the amount that you would need to pay back for each grant is £100 or less, it is ignored for this purpose. The £100 threshold is tested against each grant individually. For example, if you were to owe back £60 on SEISS 4 and £60 on SEISS 5, then you would not need to pay anything back even though the total amount would be £120.

This applies even if you made the amendment before making the claim for SEISS 4 and/or SEISS 5. In this case, you would need to have paid back some or all of the grant immediately.

If you made an amendment to a return on or after 3 March 2021 and after making a claim for SEISS 4 and/or SEISS 5 and as a consequence of the amendment some of the grant(s) must be repaid then you are technically required to pay the amount back immediately – although you are allowed up to 90 days from the date of the amendment (or claim to the grant, if later) to notify HMRC. GOV.UK explains more about penalties which can apply if you are late.

If you claim tax credits or universal credit, your award may be affected if you repay a SEISS grant, see the headings Tax credits and Universal credit above for more information.

HMRC compliance

From April 2022, HMRC are contacting SEISS claimants who have made amendments to their tax returns and have overpayments of more than £100 on either SEISS 4 or SEISS 5 (or on each, where both grants are claimed). HMRC will assess the amount owed due to the overpayment of the fourth and/or fifth SEISS grants and should detail how this overpayment is calculated.

If you disagree with HMRC’s calculation, you will be able to write to HMRC to appeal within 30 days of the date of your letter from HMRC. Your letter should explain why you disagree with HMRC’s calculation.

It should be possible to arrange a time to pay payment plan with HMRC if you are unable to repay the amount owed.  If the amount is unpaid within 30 days of the due date of payment, and a ‘time to pay’ arrangement has not been set up by that point, then late payment penalties may apply. Interest will also be charged on late payment.

Ineligible or overpaid SEISS grants

If you have claimed a SEISS grant but you were not entitled to receive it, by law you must 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 must also notify HMRC if you have been overpaid a SEISS grant but you were nevertheless entitled to receive a smaller amount. For the first three grants, we understand that this should be rare as HMRC made the calculations automatically based on information submitted on your self assessment tax returns. However, we understand that in a number of cases HMRC overpaid grants due to their own error, but they will not be requiring repayment of overpaid grants in these circumstances. If you are unsure, you should contact HMRC.

For SEISS 4 and SEISS 5, you might be overpaid if you amend a tax return for the 2016/17 to 2019/20 tax years, on or after 3 March 2021, and the amendment reduces the amount of the grant you would have been entitled to. This is explained under the heading Amending tax returns, above.

We understand that HMRC have been contacting a number of individuals who have claimed a SEISS grant but have previously notified HMRC that they had stopped trading, or did not complete self-employment pages on their 2020/21 or 2021/22 tax returns, or have yet to file their 2020/21 or 2021/22 tax returns. If you have received such correspondence from HMRC, you should review whether you were eligible for the grant(s) you claimed – for example, you may have restarted trading before making a claim (even if it is a different trade).

If you receive a letter from HMRC checking your eligibility to claim some or all of the five grants, then do not ignore the letter. You should respond to HMRC within the timescale set by HMRC – this is normally 30 days. Also, you should consider the following points:

Did you claim the SEISS grants?

Unfortunately, there have been cases of fraud with the SEISS grants. This is where someone claimed a grant using your personal details without your knowledge. Speak to HMRC as soon as possible if you didn’t claim the grants and so may have been affected by this.

Which SEISS grants are HMRC asking about?

It may be the case that HMRC have concerns about a specific SEISS grant only rather than all the grants you have received. The letter should clearly state which grant payments HMRC are asking you about.

Have you filed a self assessment tax return for 2020/21 or 2021/22?

In most cases the first three SEISS grants should have been included on your 2020/21 tax return. So, if you claimed one of the first three grants and have not yet filed a 2020/21 tax return HMRC will be concerned that you were not trading when you claimed these SEISS grant(s) and so did not meet one of the eligibility requirements.

If you have filed your 2020/21 and 2021/22 tax returns, HMRC may have questions about information included on your return which could mean you should not have claimed the SEISS grant(s).

Did you meet the eligibility conditions at the point you made the claim for the SEISS grant?

The eligibility criteria did differ between the first and second grants, the third grant and the fourth and fifth grant. There was also an additional financial impact declaration test for the fifth grant which affected the amount of grant you could claim (we explain more about this test under the heading Financial impact declaration (FID) test, above).  We detail the different eligibility criteria under the heading, Key features, above.

Remember, there are some eligibility conditions which relied on a judgement call at the point of making each SEISS grant claim, such as the intention to carry on trading, or whether your business was adversely affected (as explained under the heading Adversely affected, above) during the coronavirus pandemic.

Time limits

The date by which you must notify HMRC is 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 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.

For the first three grants, if you had not repaid the amount by the time you filed your self assessment tax return for 2020/21 (you had until 28 February 2022 to submit your 2020/21 tax return online without being charged a late filing penalty), you should have self-assessed a tax charge as part of your 2020/21 self assessment tax bill equal to 100% of the amount of the first three grant(s) to which you were not entitled. This was due for payment on 31 January 2022 as part of the self assessment tax payment due by that date.

Overpayments of SEISS 4 and SEISS 5 should have been repaid as part of your self assessment tax return for 2021/22 in a similar way, if they haven’t already been repaid to HMRC or otherwise directly assessed.

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

Penalties

If you do not notify HMRC within the 90-day time limit explained above, you may also be charged a penalty unless the failure was not deliberate, and you had a reasonable excuse. However, provided you did not know when you received the grant(s) that you were not entitled to part or all of it/them, there should be no penalty provided you reported the overpaid grant(s) on your 2020/21 tax return by 28 February 2022 (for the first three grants) or on your 2021/22 tax return by 31 January 2023 (for the fourth and fifth grants).

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.

Voluntary repayments

We understand that some individuals feel like the SEISS grants have 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 grants individuals have received. This includes overpayments of £100 or less on either (or each) of the fourth and fifth grants following an amendment to any of the 2016/17 to 2019/20 tax returns after 3 March 2021 (as explained under the heading Amending tax returns above). 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 2 and 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 was included on your 2020/21 (for the first three grants) or 2021/22 (for the fourth and fifth grants) self assessment tax returns.

More information

There is information on GOV.UK on how to tell HMRC and pay back a SEISS grant if you think you have overclaimed or were not eligible for a grant(s).

GOV.UK also has guidance on penalties for not telling HMRC about SEISS grant overpayments.

You can check how much SEISS grants you received using this tool on GOV.UK.