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The Self-Employment Income Support Scheme was first announced by the government in March, providing critical support to the self-employed workers impacted by coronavirus. Recently, Chancellor Rishi Sunak announced a new extension to this scheme, taking the form of 2 further grants, each available for 3 month periods covering November 2020 to January 2021 and February 2021 to April 2021.
This means that the self-employed will be able to claim aid of up to 80% of profits during the month-long lockdown, up from the current 40%. However, not all those who are self-employed will qualify for this scheme, as critics point out that many freelancers, contractors and newly self-employed professionals will remain excluded.
What is the SEISS?
The Self-Employed Income Support Scheme (SEISS), is a government scheme available to eligible workers which currently allows them to claim support covering 40% of their average earnings from last year to cover a period of three months, capped at £3,750.
The new enhanced scheme will open for applications from the end of November, and covers 80% of trading profits for that month. Including the new higher November grant, it means the November-January payment will be at 55% of profits, up to a maximum of £5,160.
Who is eligible for this scheme?
Eligibility criteria will be the same as for previous grants, meaning that as many as 2.9 million freelancers, contractors and newly self employed people will remain excluded. The Association of Independent Professionals and the Self-Employed (IPSE) said the new measures will give "support to some", but "wilfully ignore a third of self-employed".
To be eligible for the grant extension self-employed individuals, including members of partnerships, must:
- Have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
- Declare that they intend to continue to trade and either:
o Are currently trading but are impacted by reduced demand due to coronavirus
o Were previously trading but are temporarily unable to do so due tocoronavirus
What does the new extension cover?
The extension will last for 6 months, from November 2020 to April 2021. Grants will be paid in 2 lump sum instalments each covering a 3 month period. The third grant will cover a 3 month period from 1 November 2020 until 31 January 2021.
The Government will provide a taxable grant calculated at 80% of 3 months average monthly trading profits, paid out in a single instalment and capped at £7,500 in total. This is an increase from the previously announced amount of 55%. The Government is providing the same level of support for the self-employed as is being provided for employees through the Coronavirus Job Retention Scheme which has also been extended until March 2021.
The Government has already announced that there will be a fourth grant covering February 2021 to April 2021.
How to claim
Claims for the extended grant will open on 30 November 2020. HMRC will provide full details about claims and application guidance on GOV.UK when they become available.