The first SEISS pay payment is providing a grant to self-employed individuals equivalent to up to 80 per cent of their average monthly trading profits, capped at £2,500, to cover at least the three months from March.
This amount is being paid in a single lump-sum and is based on tax returns from 2016-17, 2017-18 and 2018-19.
Unlike the furlough scheme, self-employed individuals are still be able to do business while they are in receipt of a grant from the scheme.
The Government has now announced a second and final SEISS payment. This second grant is worth 70 per cent of an individual’s average trading profits for a three-month period, capped at £6,570 in total and paid in a single instalment.
There is no requirement to have made a claim for the first round of funding in order to be eligible for the second.
As with the first round of funding, applications will be made via an online portal, set to open in August. Details of the current application process can be found here.
A self-employed individual must have trading profits of no more than £50,000 and must receive the majority of their income from self-employment. Trading profits will either be based on an average of the 2016-17, 2017-18 and 2018-19 tax years, or where a person has only been self-employed for just over a year, their trading profits and total income in 2018-19.
Therefore, you must also have submitted a Self-Assessment Tax Return for 2018-19.
People who pay themselves a salary and dividends through their own company will not be eligible for the scheme but could be eligible for the Coronavirus Job Retention Scheme if they use PAYE.
Many people awaiting payment from the SEISS grant may have made applications for Universal Credit.
The Government has confirmed that you should record the grant as part of your self-employment income and that it may affect the amount of Universal Credit you get. However, it will not affect Universal Credit claims for earlier periods.
If you are self-employed and have received payment in the form of a loan or any other form of credit covered by the loan charge, you may be able to apply for the grant.
However, your eligibility and average trading profits will be based on either:
- the average of the tax years 2016 to 2017 and 2017 to 2018
- the tax year 2017 to 2018 if you were not self-employed in the tax year 2016 to 2017
Please note: All SEISS grants are subject to Income Tax and National Insurance contributions but does not need to be repaid.