The SEISS will support self-employed individuals (including members of partnerships) whose income has been negatively impacted by COVID-19. The scheme will provide a grant to self-employed individuals or partnerships, worth 80% of their profits up to a cap of £2,500 per month.

HMRC will use the average profits from tax returns in 2016/17, 2017/18 and 2018/19 to calculate the size of the grant. The scheme will be open to those where the majority of their income comes from self-employment and who have profits of less than £50,000. The scheme will be open for an initial three months with people able to make their first claim by the beginning of June.

To be eligible for the scheme, the taxpayer must meet all the criteria below:

• Be self-employed or a member of partnership;
• Have lost trading/partnership trading profits due to COVID-19;
• File a tax return for 2018/19 as self-employed or a member of a trading partnership (those who have not yet filed for 2018/19 will have an additional four weeks from this announcement to do so);
• Have traded in 2019/20; be currently trading at the point of application (or would be except for COVID-19) and intend to continue to trade in the tax year 2020/21; and
• Have trading profits of less than £50,000 and more than half of total income coming from self-employment.

This can be with reference to at least one of the following conditions:

• Trading profits and total income in 2018/19; or
• Average trading profits and total income across up to the three years between 2016/17, 2017/18, and 2018/19.

Individuals should not contact HMRC now. HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational. HMRC will then pay the grant directly to eligible claimants’ bank accounts.

HMRC is urgently working to deliver the scheme; grants are expected to be paid out from the beginning of June 2020. For eligible individuals who have not submitted their returns for 2018/19, they will have four weeks’ notice from the date of the announcement to file their returns and therefore become eligible for this scheme.

According to HMRC, the date of June 2020 is necessary to ensure that the scheme is both deliverable and fair. In the interim, the self-employed will still be eligible for other government support including universal credit and business continuity loans. For self-employed businesses that employ workers, the coronavirus job retention scheme may also apply.