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SEISS & business grants: the government's financial support for the self-employed

Ellie Lister | Friday 8th January, 2021

Updated on the 8th January 2021

Penfold is sending our very best wishes to everyone in the self-employed community who've been hit hard by Coronavirus and lockdown.

As we're now entering the third lockdown, government support is being extended to help the self-employed throughout these months. We’ve broken down all of the government’s initiatives based upon situation & eligibility, so that you know exactly what you're entitled to receive and how to get it. The full details are not all available yet, so we'll update this blog as and when we get more information.

We’ve split this post into two sections - first is for sole traders - and the second half is for everyone with a limited company who employs themselves.

Sole Traders

1. The Self-employment Income Support Scheme (SEISS) Extensions 3 & 4

Grant 4:

NEW: The government has announced that there will be a 4th SEISS grant covering February to April 2021, but thedetails of the scheme are yet to be revealed. We'll update this section once the information becomes available.

Grant 3:

This grant is based on 3 trading months: November, December and January's average earnings, calculated on the basis of 80% of average earnings over this period, capped at £7500. Originally, the plan was to cover 55% of trading profits over the three months, but it was increased in November to 80%.

You have until the 29th of January 2021 to claim for the third grant, head to the UK Gov website to apply.

Am I eligible?

1. You need to declare that your business has been impacted by reduced demand by Covid-19 up until you make the claim. This differs from grants 1 & 2. This mainly means you can't claim if you couldn't work due to self-isolating or shielding.

2. You must have been previously eligible for the SEISS 1 & 2 grant, but you don't need to have claimed them. These requirements include the bullets below:

You have to be self-employed or a member of a partnership:

  • The government is asking that you have to have traded in 2019-20 and trading in 2020-21
  • To prove this, they require a tax return for the financial year 2018-2019

3. You have to have trading profits less than £50,000 & more than 50% of your total annual income comes from self-employment:

  • This can be proven by the trading profits and total income in your 2018-19 & 2019-20 tax return
  • It can also be proven by the average of your trading profits and total income across the three financial years - 2017-18, 2018-19 and 2019-20

4. You must be actively trading & intend to trade. You can of course continue working.

What support can I get in the meantime?

June is a long way away for many, and the government completely understands this. In the meantime, if you are eligible you can apply for Universal Credit and/or Business Loans.

2. Universal Credit

Despite the small headline numbers of £94 a week, applying for Universal Credit IS a good idea! Although it has been highlighted that this scheme will not cover all your outgoings, it is worth taking an hour or so out to apply to get some support whilst you wait for your SEISS grant to come through.

Am I eligible & how can I prove it?

1. You’re on a low income or out of work:

  • This applies to everyone given the current climate
  • All work/ jobs taken by yourself are considered for Universal Credit. And, you will need to provide reports on your earnings at the end of each monthly assessment period 
  • To provide evidence of your earnings you can use:
    -Tax returns, accounts and Unique Taxpayer Reference (UTR) 
    -Customer & supplier lists, recipients and invoices
    -Marketing materials 

2. You live in the UK, are over 18 and under the State Pension age.

3. You have savings of less than £16,000:

  • This includes the cumulative savings of both yourself and partner. To find out what counts towards your savings, click here

How much will I be paid?

There is no set figure applied to everyone, as this is worked out on your individual circumstances. You may find more information here or also use this benefit calculator here.

There is no set figure applied to everyone, it is worked out on your individual circumstances.

Limited Companies

For Limited company owners, you can claim both the CJRS and business grants. Do not forget that you can also claim Universal Credit, as the schemes below may not cover your monthly wage sufficiently.

1. Coronavirus Job Retention Scheme (the furlough scheme)

The CJRS has been extended by 1 month to the end of November, for business owners/ employees who've furloughed themselves. If you draw an income from your company via a UK PAYE scheme, you can keep yourself on the payroll and HMRC will reimburse up to 80% of your standard salary for hours not worked, capped at £2,500. This unfortunately won't cover much at the moment, as likely more of your income is in dividends, but it can help.

The Chancellor announced on the 5th November that CJRS will still be available to all parts of the UK that are under the highest levels of Covid-19 restrictions until April 2021.

The next self-employed grant, which covers the period November to January, will also now increase to 80 per cent of average profits up to £7,500 over the three-month period.

Am I eligible & how can I prove it?

  • You have to be a furloughed worker. To declare earnings and submit information about your furloughed employees, head here
  • You, as the employee, must have been on the payroll for submission made to HMRC by 23:59 on 30th October 2020
  • You don't need to have claimed the other CJRS

2. Business Grants for retail, hospitality and leisure

This scheme is to support smaller businesses that are closed due to lockdown. This is a one-off grant and the amount depends on the rateable value of your business property, which is based on a property's annual market rent, size & usage determined by the Valuation Office Agency (VOA). You can workout the rateable value of your business here.

For properties with a rateable value of £15k or under, you could receive a grant of £1,334 per month

For properties with a rateable value of £15-51k, you could receive a grant of £2,000 per month

For properties with a rateable value of £51k or over, you could receive a grant of £3,000 per month

We understand that this is a lot of information to get around, but we want to give whatever help we can to make these applications as stress-free for you as possible in these uncertain times. 

3. Business loans

You have until the 31st March 2021 to apply for a Bounce Back Loan or the Coronavirus Business Interruption Loan. The new rules allow you to apply for a top-up if you've already taken a Bounce Back loan and borrowed less than 25% of your turnover, up to £50,000.

However, you can only top-up either loan once.

How Can Penfold Help You?

Penfold is the pension built for the self-employed.  When you work for yourself, you don’t have a HR team to sort out your pension, but Penfold makes it easy & simple. It takes just 5 minutes to set up, online or on the app! It’s completely flexible & perfect for sole traders, contractors, or limited company directors.

You can sign up here!

As always, please feel free to get in touch with us on our online chat, or email us here if you’ve got any questions about what you think you’re eligible for or any other questions. 

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