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October 23, 2020

Everything you need to know about the SEISS extension as a freelancer

Written by Jack Lewis

2020 has been tough for everyone, but freelancers have been especially hard-hit. At the start of lockdown, freelancers were being released from their contracts en-masse and offers of new work were scarcer than a 9-pack of loo roll and a bag of pasta. The furlough scheme offered support of up to 80% of wages for employees who could no longer go out to work. “Won’t somebody think of the freelancers?!” we wailed, and we were heard. Well, sort of. Along came the Self-Employment Income Support Scheme (SEISS). This blog gives the lowdown on the SEISS and its recent extension – so that freelancers know what government support in available to get them through the winter. 

What is SEISS? 

The government launched the SEISS scheme to help freelancers recover some of their income lost to COVID-19. If you can’t work, or your business has been affected by coronavirus and the national and local restrictions put in place, you may be eligible to claim for some of these lost earnings. The scheme so far has had three stages. 

First SEISS grant: The scheme originally opened in mid-May, and covered businesses for the period up to 13th July. It covered lost earnings at 80% of trading profit, calculated based on 2018-19 tax returns. Claims for the first grant are now closed. 

Second SEISS grant: The SEISS scheme was then renewed to cover July to October, covering 70% of lost earnings. Claims for this grant must be submitted by 19th October. 

SEISS extension scheme: The recent extension was announced in October. This will provide up to two further grants, covering the next six months. 

The first grant will cover the period from 1 Nov 2020 – 31 Jan 2021. This will be: 

  • A taxable grant 
  • Up to 20% of average monthly trading profits 
  • Paid as one single instalment covering 3 months 
  • Capped at £1,875 in total. 

HMRC say that this level of support is roughly equivalent to that being offered to employees through the Coronavirus Job Retention (furlough) scheme. A second extension grant will cover the period from February until the end of April 2021. HMRC has yet to set the level of this grant and say it will be announced in due course. 

The government has not yet announced any additional support for the self-employed living under conditions of higher local lockdown tiers. The situation with COVID-19 is changing all the time, so keep your eye on the HMRC website for the latest guidance and updates for the self-employed. 

Is SEISS still available to freelancers? 

The government says that most people who are self-employed will be eligible for these packages of support – that includes freelancers. However, all SEISS grants are subject to the following criteria and so unfortunately not every freelancer will be eligible. Indeed, research estimates there are up to 3 million UK taxpayers who fall outside the eligibility for government COVID schemes. 

You are eligible if you: 

  • are self-employed or a member of a partnership 
  • you traded in the tax year 2018 to 2019 (and submitted your Self-Assessment tax return) 
  • you traded in the tax year 2019 to 2020 
  • you have and intend to continue trading in the year 2020 to 2021 
  • self-employment makes up at least 50% of your income 
  • your trading profits are less than £50,000. 

The amount you will be paid is calculated based on the information you submitted in your 2018-2019 Self-Assessment. Even if you have not claimed the two previous SEISS grants, you are still entitled to claim from the new extension scheme if you are eligible and your business is affected by coronavirus. 

You can’t claim if: 

  • you trade through a limited company or trust 
  • you became self-employed after 6th April 2019 
  • you work (or have worked) a mix of PAYE and self-employed jobs, with self-employment making up less than 50% of your income 
  • your trading profits are more than £50,000. 

Income from other sources may affect your entitlement, and periods of PAYE employment can affect the average profits that the scheme calculates for you. 

How do I access SEISS? 

If you fit the criteria outlined above and your business continues to be affected by coronavirus, you can put in a claim to the extension scheme. The government has not yet released specific details of how to do this. However, it is expected to be similar to the previous rounds of grants. If you are registered as self-employed and HMRC think you may be eligible for SEISS they will email you telling you what date you can apply from. You apply online via a form on the HMRC website and once your claim has been assessed the money will be paid straight into your bank account. 

You’ll need the following information to hand: 

  • Your Unique Taxpayer Reference (UTR) – you should have this from when you submitted your Self-Assessment 
  • Your National Insurance (NI) number 
  • Your Government Gateway ID and password – again these are used when you log in to your Self-Assessment account so hopefully you have these written down somewhere! 
  • Your bank account details 

You have to make the claim yourself – unlike a tax return, an agent can’t do it on your behalf. 

Is there any other government help I can benefit from as a freelancer? 

HMRC has previously said that if you have any Self-Assessment payments on account due by 31 July 2020, you can defer these until January 2021. We don’t yet know whether this will be extended if the economy continues to be affected by coronavirus. 

If you fall through the gaps of all of the current support schemes, or you are still struggling to get by, you may be eligible for additional support. Entitled To is a good resource for understanding any benefit payments that you may be eligible for. Universal Credit is a monthly payment to help with your living costs if you’re on a low income, are out of work, or can’t work. You can apply online through the government’s website. These support schemes are here to help, and you shouldn’t be afraid to claim them if you’re in need – we have to look after each other in these times! And of course it’s always worth getting advice from your accountant to ensure you are applying for the correct schemes.  

That’s also where we come in: looking after each other. Dinghy is committed to making insurance for freelancers and the self-employed fairer. So if you’ve got no work coming in at the moment, you can press pause on your cover. We never charge admin fees or interest on monthly payments. We’ll even help you chase unpaid invoices – it all helps, right? Log on or call 0116 830 5654 for your quote today. 

About Jack Lewis

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