'I'm self-employed but confused about whether I can claim the fifth grant' – Unsure? Here's what you need to know
The self-employment income support scheme has now CLOSED
Applications for the fifth and final self-employment income support scheme (SEISS) grant have now CLOSED, marking the end of this particular Government scheme. For your reference, we've kept information in this guide about how SEISS worked, and who was able to apply.
Please note that the self-employment income support scheme (SEISS) came to a close on 30 September.
All of the information throughout this guide about how SEISS worked whilst it was still running – between March 2020 and September 2021 – has however been kept in place for your reference.
Some of the information further down in this guide, including that on business grants, is still relevant even though SEISS has ended.
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In this guide
Now closed. The Self-Employment Income Support Scheme has ended
Update Fri 1 Oct 2021. Please note that the Self-Employment Income Support (SEISS) has now ended. All of the information below on how SEISS worked whilst it was still up and running, including the frequently asked questions, has however been kept in place for your reference. The tenses used haven't been changed, which is why the section reads as if the scheme is ongoing.
Our main Self-Employed guide has all the info on how the fifth Self-Employment Income Support Scheme (SEISS) grant works, but in short, here are the basics:
The fifth and final self-employed grant is worth up to £7,500. It covers May to September.
Everyone who's eligible for the fifth (and final) SEISS grant is given an 'earliest date to apply'. For some this was as early as the end of July. Since the first week of August, everyone who's eligible has been able to apply. These staggered application dates were brought in to avoid HMRC's systems crashing and everyone will have until 30 September – this deadline being imminent – to claim.
You MUST have filed a 2019/20 tax return to be eligible. The deadline to file this with HMRC was 31 January, but the Chancellor specifically said in his 2021 Budget announcement that the scheme would be open to you if you'd filed by 11.59pm on 2 March.
You must earn at least 50% of your total income from self-employment. To check this, HMRC will first look at your 2019/20 tax return to see if it was the case then – if you don't qualify based on 2019/20 alone, it will then look at the tax years 2016/17, 2017/18 and 2018/19 to see if the average of your trading profits across the four tax years was more than 50% of your total income.
Your average trading profit must be £50,000/year or less. This is essentially a 'cliff-edge' requirement – so those whose average annual trading profit is more than £50,000 (to be specific, £50,000.01 or above) won't be able to get any support from this scheme.
The max you can get - £7,500 - is dictated by your profits while how much you will get of that max is dictated by turnover. This will be determined by comparing your pandemic turnover with your pre-pandemic turnover - but crucially the newly self employed (ie, those who started trading in 2019/20) do NOT need to do this.
For the "turnover test" you'll be asked for two turnover figures, which you'll need to have to hand when making your claim. First, you will be asked for your turnover for the 12-month period between April 2020 to April 2021, next you will need a second 12-month "reference" turnover figure from either the 2019/20 OR 2018/19 tax years. We've full information in our main self-employed help guide.
- If your turnover's fallen by 30% or more... you'll be able to claim the full grant worth 80% of three months’ average trading profits, capped at £7,500.
- If your turnover's fallen by less than 30%... you'll be able to claim a grant worth 30% of three months' average trading profits, capped at £2,850.
Who is eligible for the fifth grant?
Real-life scenarios
Update Fri 1 Oct 2021. Please note that the Self-Employment Income Support (SEISS) has now ended. All of the information below on how SEISS worked whilst it was still up and running, including the frequently asked questions, has however been kept in place for your reference. The tenses used haven't been changed, which is why the section reads as if the scheme is ongoing.
It's understandable that you might feel nervous about what does and doesn't count as a legitimate claim. That's why we're listing real-life examples. If there is a particular scenario you'd like us to look into, do let us know via email.
Here's what is and isn't accepted as being a reason to claim for the fifth grant:
'Reduced demand' scenarios | Can I make a claim? |
|---|---|
A cafe owner has fewer customers due to Government restrictions on households mixing, which reduces her takings. She reasonably believes this will significantly reduce her trading profits. | Yes |
A plasterer cannot get materials due to supply chain issues because of coronavirus. This has reduced the amount of work he can complete and be paid for. He reasonably believes this will significantly reduce his trading profits. | Yes |
A part-time personal trainer works in a gym that has closed due to Government restrictions. This reduces her business activity on the days that she works. She reasonably believes this will cause a significant reduction in her trading profits. | Yes |
A cafe owner has fewer customers due to Government restrictions on households mixing, which initially reduces her takings. She increases her prices and believes her trading profits will not reduce significantly. | No |
A plasterer cannot get materials due to supply chain issues because of coronavirus. This has reduced the amount of work he can complete and be paid for, but he manages to find a new supplier. He doesn't believe that the reduced demand will cause a significant reduction in his trading profits. | No |
'Unable to trade' scenarios | Can I make a claim? |
|---|---|
A hairdresser has had to shut his shop due to Government restrictions. He won't have any income due to the closure and reasonably believes the reduction in his trading profits will be significant. | Yes |
A builder has received a letter from the NHS identifying him as 'clinically extremely vulnerable' and it asks him to stay at home. As he is unable to work from home he has a reasonable belief that there will be a significant reduction in his trading profits. | Yes |
A hairdresser was unable to work for two days as his hair salon closed to be deep-cleaned due to a positive coronavirus case. He doesn't believe this will significantly reduce his trading profits. | No |
A builder has developed coronavirus symptoms and self-isolates for five days before receiving a negative test result. During those five days he was unable to work from home but was able to rearrange his contracts. He doesn't believe there'll be a significant reduction in his trading profits. | No |
Other scenarios | Can I make a claim? |
|---|---|
An electrician is still trading but has had increased costs due to buying masks, cleaning supplies and screens. | No |
A dentist returns from a holiday abroad and has to self-isolate due to quarantine rules. | No |
An accountant reduces his business activity because he wants to retire partially. He reasonably believes this will result in a significant reduction in his trading profits. | No |
The client of a dog walker cancels a contract due to coronavirus. The dog walker could but chooses not to look for additional work to replace the contract. | No |
An IT consultant has other income from renting property. He has made losses on renting due to renovation costs. | No |
Criteria for the fourth grant largely follows the same criteria as the third grant. However, for the first two grants, which are now closed, you were only required to have been "adversely affected" by coronavirus.
In its published guidance, HMRC said the following WOULD constitute being "adversely affected":
If you're unable to work because:
You're shielding.
You're self-isolating.
You're on sick leave because of coronavirus.
You have caring responsibilities because of coronavirus.
You've had to scale down or temporarily stop trading because:
Your supply chain has been interrupted.
You have fewer or no customers or clients.
Your staff are unable to come in to work.
It's also worth noting that as far as the law is concerned – and this will be hard for all those excluded to read – it doesn't actually matter if you need the money or not. While most people who claim will need it, and need it badly, the Treasury Direction makes no mention of needing the money as a rule for accepting it.
What was the guidance for the previous grants?
IMPORTANT: You need to keep evidence
Update Fri 1 Oct 2021. Please note that the Self-Employment Income Support (SEISS) has now ended. All of the information below on how SEISS worked whilst it was still up and running, including the frequently asked questions, has however been kept in place for your reference. The tenses used haven't been changed, which is why the section reads as if the scheme is ongoing.
For the fifth Self-Employment Income Support Scheme grant you are expected to keep any evidence that your business has been hit by reduced demand or has been temporarily unable to trade. This means you must have kept a copy of all records in line with normal self-employment record-keeping requirements, including:
Business accounts showing a reduction in turnover.
Dates your business had to close due to lockdown restrictions.
Shielding or caring responsibilities due to school closures.
Records of reduced or cancelled contracts or appointments.
Fewer invoices.
A record of dates where you had reduced demand or capacity due to Government restrictions.
NHS Test and Trace communications (if you've been abroad and have to self-isolate, this doesn't count).
Test results if you've been diagnosed with coronavirus.
Remember, as we mentioned above, if your business recovers after you've claimed, your eligibility will not be affected as this is based on your reasonable belief that your trading profits would have been significantly reduced at the time you made your claim.
HMRC's on the lookout for fraudulent claims
Update Fri 1 Oct 2021. Please note that the Self-Employment Income Support (SEISS) has now ended. All of the information below on how SEISS worked whilst it was still up and running, including the frequently asked questions, has however been kept in place for your reference. The tenses used haven't been changed, which is why the section reads as if the scheme is ongoing.
Let's make it clear here: HMRC has told us it's "not looking to trip people up", so any "eligible people who believe they are affected should claim with confidence".
However, HMRC will come down hard on fraudulent claims. It says it will check claims using a "risk-based" approach and take "appropriate action" to withhold or recover payments found to be dishonest or inaccurate. It says there is "no doubt" it will take action in cases of suspected fraud or an organised criminal attack.
The guidance says: "If you know you've been overpaid or are not eligible for the grant and do not tell us, you may have to pay a penalty."
The draft Treasury legislation provides HMRC with compliance and enforcement powers in relation to the SEISS. These include powers to check and recover any amount of a grant payment that the recipient is not entitled to. Recovery would apply in all cases where the grant has been overpaid, whether the error was fraudulent, careless or a mistake. In cases where HMRC can demonstrate there has been deliberate non-compliance, HMRC may issue a penalty.
Are there any circumstances under which I would have to pay the grant back?
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