Background information

The Self-employed Income Support Scheme was announced by the British government on 26 March 2020 in the context of more stringent lock-down measures which entered into force on 23 March 2020. As such measures required many self-employed individuals to close their businesses or restricted their ability to make a living, the scheme was introduced to bring support in line that available to employees under the Coronavirus Job Retention Scheme.

Content of measure

On 26 March 2020 the Self-Employed Income Support Scheme was announced to allow certain groups of self-employed individuals to claim a taxable cash grant worth 80% of average monthly trading profits over the last three years up to a maximum of €2,820 (GBP 2,500) for three months (could be extended). The grant will be subject to Income Tax and National Insurance contributions but does not need to be repaid. This is intended to match the protection provided to employed individuals, thus covering this group for the first time. The scheme is run directly through Her Majesty's Revenue and Customs (HMRC) which contacts eligible individuals from May 2020 onwards.

On 29 May the Government announced a second round of the SEISS, with those eligible able to claim a second grant, worth 70% of their average monthly trading profit, for a further three months, capped at GBP 6,570 in total. On 2 July a second Treasury Direction was published to this effect. Applications for the second grant were opened on 17 August, and were closed on 19 October.

On 24 September the Government announced an extension to the SEISS to be introduced in November, to cover the six months up to the end of April 2021. The SEISS Grant Extension would be made in two taxable grants – first to cover November to January, second to cover February to April.

Initially it was proposed that the first of these grants would cover 20% of average monthly trading profits, capped at GBP 1,875, but this figure has been revised three times. On 22 October the Chancellor announced the first grant would cover 40% of average monthly trading profits, capped at GBP 3,750. On 2 November the Chancellor announced that the payment for the first month (November) of the first grant would be set at 80% – increasing the total level of this grant to 55% of trading profits, capped at GBP 5,160. Subsequently on 5 November the Chancellor announced that all three months of the first grant would be calculated on the basis of 80% of average trading profits, up to a maximum of GBP 7,500.

On 24 November the Government published a further Treasury Direction underpinning the scheme. Applications for the third SEISS grant opened on 29 November and are to close on 29 January 2021.

There is to be a fourth round; details of this will be announced on 3 March 2021.

Use of measure

Following the criticism that businesses are likely to have to wait five weeks for first payments to be made (the delay is partly to accommodate firms having to file tax returns - required to be able to claim the benefit) and that the wait may be difficult for businesses already struggling, the Government has released data as to the take-up and cost of the scheme up to the end of June 2020.

3.4 million self-employed individuals were identified as potentially eligible for the SEISS scheme. This means that they met the income and trading activity criteria for the scheme based on Self-Assessment returns from 2018-19 and earlier years. However, some of these businesses will not have continued trading since 2018-19 or will not have been adversely affected by Coronavirus so will not be eligible.

• On the 13 May, there had been 441,000 claims made, with a total value of GBP 1.3 billion.
• By the 31 May, the total number of claims was 2.5 million, with a value of GBP 7.2 billion.
• By the 30 June, the total number of SEISS claims was 2.6 million (75% of the potentially eligible population), with a value of GBP 7.7 billion. The average value per claim was GBP 2,900.

Around two-thirds of the potentially eligible population are male (2.3m). A lower proportion of potentially eligible females have claimed a SEISS grant (70%) compared to males (78%). The average claim for females is also lower at GBP 2,300 compared to the average claim for males of GBP 3,200. By 30 June, HMRC had received 1,805,000 claims from men totaling GBP 5.7bn compared to 745,000 claims from women for GBP 1.7bn.

Around 90% of claimants are aged between 25 and 64 and take-up of the grant in those age groups is at or above 75%. No one age group dominates and claims are evenly spread.  The take up rate is noticeably lower for those who are aged 65 and over (60% have claimed), although they have the highest average claim value at GBP 3,300. The youngest age group have the second lowest take up rate (68%) and the lowest average claim value at GBP 2,100.

The sector with the highest number of potentially eligible individuals and the highest proportion of claims is the construction industry. By 30 June, construction workers had made 867,000 claims for SEISS totaling GBP 3.1bn, an average of GBP3,500 per claimant.  Self-employed individuals in the transportation and storage sector make up 8% of the potentially eligible population and made 221,000 claims totaling GBP 481m. Administrative and support services also make up 8% of the potentially eligible population and have made 193,000 claims totaling GBP 399m.

The two regions with the highest number of claims are London (484,000) and the South East (373,000), reflecting their relative sizes.

On the 18 September, a further update on take-up of the scheme was published. The data covers the period up to the 31 August. Around 5 million individuals reported self-employment income for the tax year 2018 to 2019, and had their data assessed for potential SEISS eligibility. In order to be assessed, a self-employed individual needed to have traded in the tax year 2018 to 2019 and submitted a Self Assessment tax return on or before 23 April 2020 for that year. Via this process then, 3.4 million self-employed individuals were identified as potentially eligible for the SEISS scheme. This means that they met the criteria for the scheme based on Self Assessment returns from the tax year 2018 to 2019 and earlier years. However, some of the potentially eligible businesses will not have been adversely affected by Coronavirus or have ceased trading since the tax year 2018 to 2019 so will not have been eligible.

The updated data shows that:

• by 31 August, 2.0 million (60%) of the potentially eligible population had claimed a second SEISS grant with the value of these claims totalling GBP 5.1 billion
• the average value per claim was GBP 2,500
• around two-thirds of the potentially eligible population are male (2.3 million). A lower proportion of potentially eligible females have claimed a SEISS grant (54%) compared to males (62%)
• the average claim for females is also lower at GBP 2,000 compared to the average claim for males of GBP 2,700
• around 90% of claimants are aged between 25 and 64 and take-up of the grant in those age groups is at or above 56%. No one age group dominates and claims are evenly spread
• the sector with the highest number of potentially eligible individuals and the highest proportion of claims is the construction industry. By 31 August, construction workers had made 693,000 claims for SEISS totalling GBP 2.1bn
• the two regions with the highest number of claims are London (390,000) and the South East (292,000), reflecting their relative sizes
• of the 1.6 million that did not meet the SEISS criteria, 1.4 million (87%) had trading profits less than non-trading profits (eg. income from employment or investment income), 0.5 million (33%) had trading profits of GBP 0 or made a loss and 0.2 million (11%) had trading profits over GBP 50,000. (N.B. Individuals may be counted more than once if they have trading profits which meet more than one of these criteria which explains why the figures sum to more than 1.6 million)

The latest data (November 2020) show that:

• around 5 million individuals reported self-employment income for the tax year 2018 to 2019, and had their data assessed for potential SEISS eligibility. In order to be assessed, a self-employed individual needed to have traded in the tax year 2018 to 2019 and submitted a Self Assessment tax return on or before 23 April 2020 for that year.
• via this process, 3.4 million self-employed individuals were identified as potentially eligible for the SEISS scheme. This means that they met the criteria for the scheme based on Self Assessment returns from the tax year 2018 to 19 and earlier years. However, some of the potentially eligible businesses will not have been adversely affected by Coronavirus or have ceased trading since the tax year 2018 to 19 so will not have been eligible.
• by 31 October 2.3 million (69%) of the potentially eligible population had claimed a second SEISS grant with the value of these claims totalling GBP 5.9 billion.
• compared with the end of September, an additional 89,000 people had claimed the grant by 31 October.
• the average value per SEISS 2 claim was GBP 2,500.
• around two-thirds of the potentially eligible population are male (2.3 million). the average claim for females is also lower at GBP 2,000 compared to the average claim for males of GBP 2,700.
• around 91% of claimants are aged between 25 and 64 and take-up of the grant in those age groups is at or above 67%. No one age group dominates and claims are evenly spread.
• the sector with the highest number of potentially eligible individuals and the highest proportion of claims is the construction industry. By 31 October, construction workers had made 800,000 claims for SEISS totalling GBP 2.4 billion.
• the 2 regions with the highest number of claims are London (465,000) and the South East (338,000), reflecting their relative sizes.
• of the 1.6 million that did not meet the SEISS criteria, 1.4 million (87%) had trading profits less than non-trading profits (e.g. income from employment or investment income), 0.5 million (33%) had trading profits of GBP 0 or made a loss and 0.2 million (11%) had trading profits over GBP 50,000. (N.B. Individuals may be counted more than once if they have trading profits which meet more than one of these criteria which explains why the figures sum to more than 1.6 million).
• by 31 October, 2.7 million individuals had claimed for either the first or second SEISS grant. Of these 2.3 million individuals (86%) claimed both grants, 319,000 (12%) claimed only the first grant and 61,000 (2%) only claimed the second grant.
• claims for only the first grant totaled GBP 951 million and claims for only the second grant totalled GBP 129 million.

Target groups

Workers	Businesses	Citizens
Self-employed	One person or microenterprises	Does not apply to citizens

Actors and funding

Actors	Funding
National government	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Informed	Informed
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Peak or cross-sectoral level

Involvement

The social partners were informed as to the government's emergency raft of measures at the start of the crisis; however, they were not formally involved in the design, implementation or monitoring of this measure.

Views and reactions

The scheme was welcomed by both the CBI and the TUC (see sources).

Sources

• 26 March 2020: Guidance on claiming a grant through the coronavirus (COVID-19) Self-employment Income Support Scheme (www.gov.uk)
• 26 March 2020: Chancellor gives support to millions of self-employed individuals (www.gov.uk)
• 26 March 2020: Guidance: Covid-19: Support for businesses (www.gov.uk)
• 26 March 2020: Response to the measures by CBI (www.cbi.org.uk)
• 26 March 2020: TUC response to new measure (www.tuc.org.uk)
• 30 June 2020: HMRC (2020) 'Statistical bulletin Self-Employment Income Support Scheme (SEISS) Official Statistics.' (assets.publishing.service.gov.uk)
• 07 July 2020: UK Government (2020) HMRC coronavirus (COVID-19) statistics. (assets.publishing.service.gov.uk)
• 18 September 2020: HMRC (2020) Self-Employment Income Support Scheme statistics: September 2020. (www.gov.uk)
• 25 November 2020: HMRC (2020) Self-Employment Income Support Scheme statistics: November 2020 (www.gov.uk)
• 10 December 2020: House of Commons Library (2020) Coronavirus: Self-Employment Income Support Scheme (commonslibrary.parliament.uk)