The government is increasing its support to the self-employed over the coming months with people also getting paid faster than previously planned.
It has revealed details of an enhanced Self-Employed Income Support Scheme (SEISS) as part of its package to support the economy as England heads into a second, month-long lockdown.
Under this third instalment of the scheme, people will receive 80 per cent of average trading profits for November.
Grants will also be paid faster than previously planned – with the claims window opening on November 30 rather than the middle of December.
As SEISS grants are calculated over three months, the uplift for November to 80 per cent, along with the 40 per cent level of trading profits for December and January, increases the total level of the third grant to 55 per cent of trading profits. The maximum grant will increase to £5,160.
The extension aims to deliver “critical support” to the self-employed in the form of two grants, each available for three-month periods covering November 2020 to January 2021 and February 2021 to April 2021.
To be eligible for the grant extension self-employed individuals, including members of partnerships, must:
• have been previously eligible for the SEISS first and second grant – although they do not have to have claimed them
• declare that they intend to continue to trade and either:
• are currently actively trading but are impacted by reduced demand due to coronavirus
• were previously trading but are temporarily unable to do so due to coronavirus
The grants will be paid in two lump sum instalments each covering a three-month period.
The first will cover the period from November 1 until January 31. The government will provide a taxable grant covering 55 per cent of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £5,160 in total.
The second grant will cover a three-month period from February 1, 2021 until April 30, 2021. The government says it will review the level of the second grant and set this in due course.
The grants are taxable income and also subject to National Insurance contributions.
The online service for the next grant will be available from November 30. HMRC will provide full details about claiming and applications in due course.
The government says the move means it is providing broadly the same level of support for the self-employed as it is for employees through the Coronavirus Job Retention Scheme in November and then the Job Support scheme in December and January.
More businesses will also be able to benefit from government loan schemes which have been extended to the end of January, while firms can ‘top up’ existing Bounce Back Loans should they need additional finance.
Announcing the moves, Chancellor Rishi Sunak said: “The rapidly changing health picture has meant we have had to act in order to protect people’s lives and I know this is incredibly worrying time for the self-employed.
“That is why we have increased the generosity of the third grant, ensuring those who cannot trade or are facing decreased demand are able to get through the months ahead.”