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Hello, I’m Sara, a Chartered Accountant who transitioned into running an online business. I understand just how daunting and confusing it can be to take the leap into self-employment. The questions, the uncertainties, and the steep learning curve are all challenges I’ve faced myself. Whether you’re in the early stages of planning to go self-employed, just dipping your toes into making money on your own terms, or already fully committed, this blog is dedicated to helping you every step of the way. Through detailed guides, expert tips, and practical advice, I aim to be your go-to resource. From mastering financial management and navigating tax obligations to setting up the foundations of your business, I’m here to provide you with the clarity and confidence you need to thrive in your self-employment journey.
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The Self-Employed Income Support Scheme (SEISS)
The Self-Employed Income Support Scheme (SEISS) was introduced to assist self-employed individuals affected financially by the COVID-19 pandemic. The scheme provides up to five taxable grants, each up to £7,500. Eligibility is based on your employment status, business profits, and submitted tax returns.
Table of Contents
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Overview of the Self-Employed Income Support Scheme (SEISS)
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Claim Amounts
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Eligibility Criteria
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Grant Calculation
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Application Process
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Alternatives If Not Eligible
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Frequently Asked Questions (FAQs)
1. Overview of the Self-Employed Income Support Scheme (SEISS)
SEISS was designed to help self-employed individuals who experienced income loss due to lockdowns and isolation measures, similar to the furlough scheme for employed workers. It consists of five taxable grants, each covering a three-month period, offering 80% of profits up to £7,500. To qualify, individuals must be registered as self-employed with business profits under £50,000.
Three rounds of grants have been issued so far, covering:
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May 2020 to July 2020
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August 2020 to October 2020
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November 2020 to January 2021
The fourth grant will cover February 2021 to April 2021, with applications opening soon. The fifth grant will be available from late July, covering May 2021 to September 2021. Eligibility for the fifth grant will depend on your turnover reduction from April 2020 to April 2021.
2. Claim Amounts
The fourth grant, like the previous ones, will be a single payment based on 80% of your average monthly trading profits from the past three tax years, up to £7,500. Eligibility for the grant will be confirmed by HMRC in mid-April, with payments available from late April to 31 May 2021.
3. Eligibility Criteria
To qualify for SEISS, you must:
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Be self-employed or a partner in a business
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Have trading profits up to £50,000
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Earn more than half of your income through self-employment
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Be currently trading or intending to trade but impacted by COVID-19
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Have traded in both the 2019/2020 and 2020/2021 tax years
4. Grant Calculation
HMRC will use your 2019/2020 tax return to determine your grant amount. If you are not eligible based on this return, they will consider your returns for the last three tax years (2016/2017, 2017/2018, and 2018/2019). If fewer tax years are available, they will use the returns you have.
For example:
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If your total trading profits over the last three years are £62,000, you would be entitled to a grant of £2,841.67.
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If your profits exceed £50,000, you are not eligible for the scheme.
5. Application Process
You can apply for the third grant from 30 November 2020 via the HMRC website, using your UTR number and National Insurance Number. If you’re not eligible for SEISS, you might be able to claim Universal Credit.
6. Alternatives If Not Eligible
If you’re not eligible for SEISS, consider applying for:
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Bounce Back Loan
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Universal Credit
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Employment Support Allowance
7. Frequently Asked Questions (FAQs)
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Should I file my 2019/2020 tax return?: It will not affect your SEISS grant calculation but must be submitted.
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Am I eligible if I’m in a partnership?: Yes, the scheme applies to partnerships as well.
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Can I claim if I started working for myself this tax year?: No, you need to have submitted a 2018/2019 tax return.
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Can CIS workers claim the grant?: Yes, they are likely eligible if they meet the criteria.
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Why are those earning over £50,000 excluded?: The scheme targets those most in need.
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Can I work and claim the grant?: No, your income must be affected by COVID-19.
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Will taxes increase post-crisis?: Possible changes are under consideration.
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Can I claim if I’m a director and shareholder of a limited company?: No, limited company directors are not eligible for SEISS. However, you might be able to furlough yourself and claim 80% of your salary up to £2,500.
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Do I need to repay the SEISS money?: No, it is a grant, but it is taxable.
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Are landlords eligible?: No, landlords are not considered self-employed for this scheme and are not eligible.