Self Employment Income Support Scheme FAQs

The fourth grant is calculated at 80% of 3 months’ average trading profits. It will be paid out in a single instalment and capped at £7,500 in total. How much you receive will depend on your average trading profits. 

Claimants must have traded in both tax years:

• 2019 to 2020 and submitted your tax return on or before 2 March 2021
• 2020 to 2021

You must either:

• be currently trading but are impacted by reduced demand due to coronavirus
• have been trading but are temporarily unable to do so due to coronavirus.

You must also declare that you:

• intend to continue to trade
• reasonably believe there will be a significant reduction in your trading profits. 

Before claiming, you should decide if the impact on your business between 1 February 2021 and 30 April 2021 will cause a significant reduction in your trading profits for the tax year you report them in.

HMRC eligibility checker

On 4 May 2020, HMRC launched an eligibility checker which can be used by those who believe they qualify for this grant.

The checker can be accessed here: https://www.tax.service.gov.uk/self-employment-support

The service simply asks for your UTR (unique taxpayer reference – a 10 digit code found on your tax return) and NI number.

Using this information it tells you whether the HMRC system currently believes you to be eligible. We have tried it on behalf of some clients and experienced mixed results as compared to expectation.

If you are eligible, you will be advised of the earliest date on which you can claim and you can enter contact details to be prompted by HMRC to do so.

Those who are not considered eligible can complete a request for re-assessment of their circumstances if they disagree.

The earliest claim date was 13 May 2020. Claims for the first, second and third grants are now closed. If you did not claim for the first, second and third grants, you are still able to claim the fourth grant if your business has been adversely affected by Covid-19.

Agents will not be able to claim on behalf of taxpayers, meaning you will need to register for a Government Gateway user ID and password (the credentials used to access the online Personal Tax Account) if you do not already have one.

If you are considering a claim, we would encourage you to use the eligibility checker and to ensure you have access to your online HMRC account as soon as possible, in order to reduce any delays to payment of this relief.

If you require assistance or support in establishing eligibility we are here to help. Please contact your usual UHY adviser, or use our contact form to get in touch.

The scheme allows for a taxable grant equivalent to 80% of average trading profits for a three month period March to May 2020, capped at £2,500 per month. Average profits will be based on the three tax years 2016/17, 2017/18 and 2018/19, starting on the date self employment commenced if that was part way through the period.

On 29 May 2020, the Chancellor extended the scheme for a further 3 months, reducing the overall cap for the additional 3 months to £6,570, in line with the reduced support for furloughed employees.

From 1 November 2020 the scheme provided a taxable grant equivalent to 80% of average trading profits for a three month period November 2020 to January 2021, capped at £2,500 per month. 

The fourth grant is calculated at 80% of 3 months’ average trading profits, paid out in a single instalment and capped at £7,500 in total. Your average trading profits will impact how much you receive. 

To be eligible you must have:

• Carried out a self employed trade during 2018/19 tax year and have filed your tax return
• Continued that self employed trade in the current 2019/20 tax year (accepting you may currently have suspended trading due to coronavirus)
• Be intending to continue that self employed trade in 2020/21 tax year
• Have lost trading profits due to COVID-19

In addition your self employed profits for 2018/19 or, alternatively, your average self-employed profits over the three years 2016/17, 2017/18 and 2018/19 (since commencement if later) must:

• Represent at least half of your total taxable income, and
• Not exceed £50,000

Taxable profits, after deducting capital allowances.

Current year losses (those who have two or more self employed trades) will be taken into account but tax relief from either brought forward losses or the personal allowance will not.

The annual profits before the effect of averaging will be used to determine eligibility for and scale of any grant.

The scheme will be administered by HMRC using data it holds from previously filed tax returns. Taxpayers are asked not to contact HMRC and instead to wait until HMRC contact them. Once contacted, potentially eligible taxpayers will be able to complete a short application and provide details of a bank account into which the money can be paid.

Payments for the first tranche of grants were received in June 2020. 

Claims for the third tranche were available from 30 November 2020 and needed to be made by 29 January 2021.

You must make your claim for the fourth grant on or before 1 June 2021. HMRC will check your claim and pay your grant into your bank account within 6 working days. You will receive an email when your payment is on it's way. 

The Government recognise the difficulties this delay will cause the self employed, but face a far bigger administrative challenge in channelling this support to taxpayers than exists for employed persons. The best advice for bridging the gap between now and June is to look at the other support available:

I’m a larger business

• Those with employees unable to be kept busy due to the pandemic should consider the Coronavirus Job Retention Scheme
• Those with employees self isolating should make use of the Statutory Sick Pay enhancements currently in place
• The VAT payment holiday should help ease cash flow
• Our business survival guides have a range of tips about business resilience during this crisis

I’m a one man band

• Lenders are offering 3 month mortgage payment holidays which should provide valuable breathing space
• Most banks are also dedicating resources to those struggling to meet their living costs. Speak to your bank about payment holidays or extended credit terms in anticipation of this grant.
• Universal Credit has been extended in scope for those unable to work. For those dipping into their savings, eligibility may begin once these reduce below £16,000
• The VAT payment holiday should help ease cash flow
• July payments on account of income tax will not be payable in 2020, easing cash flow after receipt of this grant

There is a fast disappearing window, ending 23 April 2020, for those whose 2018/19 tax return is overdue. Taxpayers who file their returns by this date will be eligible (assuming other criteria are met) but a failure to file by 23 April will see potentially eligible taxpayers miss out.

It is possible to make changes to a tax return for up to 12 months after the due date for filing. However HMRC have stated that eligibility for and the scale of the grants will be based on returns as originally filed, and that any amendments made to returns since 26 March 2020 will not be taken into account.

Yes. The grant is not conditional on work having ceased entirely, only on you having lost profits as a consequence of the pandemic. HMRC have stated “You will need to confirm to HMRC that your business has been adversely affected by coronavirus. HMRC will as usual use a risk based approach to compliance”. Claims should be made earnestly and in good faith so as not to abuse this generous support or jeopardise it for those most in need.

Yes. Partners are assessed on their partnership profit shares using the same measures as the self employed.

No. The scheme only covers the self employed and not those people working through a limited company. Those who take a salary from their limited company might be eligible for the Coronavirus Job Retention Scheme – but there has been no specific support announced for those who take the majority of their income as dividends from their limited company. You should refer to “That’s too late – how do I survive till then?” above.

If you commenced self employment on or after 6 April 2019 then no. You should refer to ‘That’s too late – how do I survive till then?’ above.

• It is likely that the online claim process will be via the taxpayer’s Personal Tax Account. Those who are not registered for a Personal Tax Account should visit gov.uk and register in anticipation.
• Since HMRC will be contacting eligible taxpayers it is important that the contact details they hold for you are up to date. Accessing your HMRC Personal Tax Account online to check those details will be 10 minutes well spent.
• Read our business survival guide. These grants are an incredibly important lifeline for the self employed but are not a substitute for planning your own business resilience both during this lock down and beyond it.