Self-employed income support scheme

We have produced this guide to provide you with an overview of these measures. Information is still being released and we will update our information for members as soon as it becomes available. Last update: 19th March 2021.

Changes for the self employed 

In the budget on the 3rd March 2021 the Chancellor announced that there will be a fifth round of the self-employed income support scheme. He also clarified the level of the fourth round grant.

Positively, those who have submitted a tax return for the tax year 2019 to 2020, and are eligible on the basis of it, will now be eligible for the scheme That means around 600,000 more people who are newly self-employed can access the fourth grant.  

However, unfortunately, we know that thousands of workers are still missing out on support, and the government have failed to plug some of the gaps that remain in the scheme 

 

How will the next stage of the SEISS work?  

The next rounds of the SEISS will be paid out in two grants each covering 3 months. 

The fifth grant can be claimed from July. The value of the grant will be determined by a turnover test. People whose turnover has fallen by 30% or more will continue to receive the full grant worth 80% of three months’ average trading profits, capped at £7,500. People whose turnover has fallen by less than 30% will receive a 30% grant, capped at £2,850. The government has said that the fifth grant covers the period May to September but note that it only covers three months of profits.  

 

What do I need to do to be eligible? 

You will need to be self-employed or a member of a partnership and have submitted your 2020-2021 tax return by 2nd March 2021.  

You must declare that: 

  • You are currently actively trading and impacted by reduced demand due to COVID, or you had been trading but are temporarily unable to do so  
  • You intend to continue to trade 
  • You believe your trading profits will be reduced due to reduced activity, capacity, demand, or inability to trade.

 The government will look first at your 2019 to 2020 tax return. If your trading profits are below £50,000 and you don’t have non-trading income of more than your trading income you will be eligible.  

If you’re not eligible based on the 2019-2020 tax return, you may be eligible based on a previous tax year- the government will look at your tax returns between 2016 and 2020.  

You must have been trading in both the tax year 2019 to 2020 and 2020-2021.  

 

What can I do if I am not eligible? 

Unfortunately, gaps in the provision for self-employed people remain, and we know there are many people who have fallen through the gaps. We continue to lobby the government to support the forgotten self-employed.  

 

Is there other support that I can benefit from as a self-employed person?  

You might benefit from some of the following schemes:  

  • Temporary changes to the rules around self-assessment tax returns.

In July 2020 many people deferred self-assessment tax payments to January 2021. Now, the government says that if you owe less than £30,000 in tax, then you will be able to use enhanced Time to Pay to spread these payments over an additional 12 months 

This means you will have the option to spread paying your tax bill from July 2020 out for a year between January 2021 and January 2022.  

  • Government Loans

You may also be eligible for the government loans schemes, whose rules have changed slightly recently. See our page on other support for information about these loans, including the Bounce Back loans and Coronavirus Business Interruption Loans.

  • VAT reduction for hospitality and tourism. If you are in one of these sectors, then you will continue to be charged a reduced rate of VAT of 5% until the end of September, followed by 12.5% for a further six months until 31st March 2022
  • Business rates relief. If you are in hospitality retail leisure or a nursery, business rates relief is extended, until 30th June 2021, and business rates will remain at reduced rate until 31st March 2022..
  • Cash grants. The government has made one off cash grants of up to either £6000 £18,000 available for hospitality, accommodation, leisure, personal care and gym businesses.   
  • Mortgage payment and credit payment holidays. You could get a mortgage payment holiday of up to six months without this being recorded on your credit file, and payments holidays are also available for car finance and personal loans, without this affecting your credit footprint. However, you’ll need to do this by 31st March. 

You might also be eligible for help through the befits system, such as Universal Credit, or Employment and Support Allowance.  

Note if you are on universal credit, and have been affected by the minimum income floor, that the floor will continue to be suspended until the end of July 2021.