Can't wait for the Self-employed Support Scheme? | moneyfacts.co.uk

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Michelle Monck

Michelle Monck

Consumer Finance Expert
Published: 26/03/2020

What is the Self-Employed Income Support Scheme?

The Self-Employed Income Support Scheme (SEISS) is a UK Government grant available to the self-employed that have had their income disrupted due to the Coronavirus pandemic.

There have so far been three grants available, with each covering a three-month period. Applications for the first three have now closed and payments already made, but applications for the fourth grant, which will cover February-April 2021, are set to open in late April. A fifth and final SEISS grant was announced in the 2021 Budget.

The grants are designed to cover a proportion of average monthly trading profits, with the amount available varying for each payment. Income tax and National Insurance will still be owed on any money received through the scheme, though as it’s a grant rather than a loan, the payment itself won’t need to be paid back.

Who is eligible for SEISS?

The eligibility criteria have been slightly different for each grant, though as applications for the first three payments are now closed, here we’re going to focus on the fourth and fifth payments through the scheme – which sees eligibility expanded to include more individuals.

Those who are self-employed or members of a partnership are eligible for SEISS. They will either be unable to trade or have had their income reduced due to Coronavirus, but in both cases they should intend to continue trading in the future. They need to have traded in the 2019/20 and 2020/21 tax years (and must have submitted their 2019/20 tax return by 2 March 2021), with profits of no more than £50,000 that are at least equal to any non-trading income – which means at least half of a claimant’s income must have come from being self-employed. They’ll also need to have “reasonable belief” that their profits will continue to suffer because of the pandemic, and they’ll need records to prove it.

How will the new SEISS payments work?

The fourth grant payment will be calculated using 80% of average trading profits between February and April 2021, capped at £7,500. The fifth grant is set to cover 80% of average profits if turnover has fallen by more than 30%, with those who haven’t seen such a reduction set to be offered a 30% grant instead. There’s as yet no confirmation of when applications for this grant will open.

Anyone who’s eligible for the fourth grant should be contacted by HMRC in mid-April, though if you’re not contacted but think you’re eligible you’re still advised to claim. Once you’ve applied, you’ll be able to find out straight away if you’ll get the grant and, if approved, you should have the money in your account within six working days.

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What to do if you do not quality for SEISS

Apply for universal credit

You can receive a monthly payment of least £342.72 for a single person under 25 and £594.04 in total for a couple where at least one of you is over 25. You can receive extra money for up to two children only. How much you receive is dependent on your earnings. Find out what you are entitled to under universal credit.

You may also be eligible for help with housing costs. Universal credit applications can take up to five weeks to process, but you can claim for an advance payment and you will usually get a decision on the same day. This advance is a loan, without interest and you will then pay it back over 12 months.
If you already receive working tax credit and decide to apply for universal credit, you will not be able to go back to this once you have made a universal credit claim (unless you get the severe disability premium). You may find that this is less generous than what you had originally claimed under the working tax credit scheme.

Apply for a Recovery Loan Scheme

The Recovery Loan Scheme is designed to replace the Coronavirus Business Interruption Loans Scheme (CBILS), which has now closed to applications. The new business lending scheme is available to businesses of all sizes and will include business overdrafts and loans, as well as asset and invoice finance.

The scheme launches on 6 April 2021 and will run until 31 December 2021, with finance of up to £10m per business set to be available.

Get paid faster and improve cashflow with invoice finance

Invoice finance allows you to receive funds of outstanding invoices when they are issued, meaning you get paid faster. Invoice finance lenders will give a percentage value of invoices raised.

 

Speak to an invoice finance broker

Find out if your business would benefit from invoice finance and how much cash you could release.

Make sure you received your £10,000 Small Business Grant

This £10,000 grant was available to those who rent or own a rateable property and receive small business rate relief (SBRR) or rural rate relief (RRR) in England. The scheme closed on 5 October 2020. The scheme operates across the UK but is managed slightly differently in each country of the UK. 

Read more about the grants available to small businesses impacted by Coronavirus.

Use your personal credit or savings

As a last resort you may decide to use your personal savings or to borrow using your own personal credit. This could include 0% credit cards or taking out a remortgage or additional lending against your own home.

Consider financial advice

Find a qualified, independent and regulated financial adviser in your area to help you make the right decisions about your financial future. A free service, quickly connect to over 27,000 experts with the help of Unbiased.co.uk. 

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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