Self Employed Income Support Scheme (SEISS) Upate

The Chancellor, Rishi Sunak, has just announced changes to the Self Employed Income Support Scheme for those whose trade continues to be adversely affected by Covid-19.

Eligible self-employed people will be able to claim a second and final SEISS grant in August; this will be a taxable grant worth 70% of their average monthly trading profits for three months, paid out in a single instalment and capped at £6,570 in total.

The eligibility criteria for the second grant will be the same as for the first grant. People do not need to have claimed the first grant to claim the second grant: for example, their business may have been adversely affected by COVID-19 (coronavirus) more recently.

Claims for the first SEISS grant, which opened on 13‌‌ May, must be made no later than 13‌‌ July. More information about the second SEISS grant will be available on GOV.‌‌UK on 12‌‌ June.

More details are available via the website.

Furlough Scheme Changes

The Chancellor, Rishi Sunak, has just announced changes to the Covid Furlough Scheme.

From 1/7/20, employees who were previously furloughed can return to work on a part time basis. This is a very welcome change for small business directors who previously had to “moth ball” their company to qualify for furlough as they were prevented from doing any work whilst on furlough. Directors will be able to work part time and claim furlough for the hours they’re not working.

For a director who has not yet put themselves on Furlough, current understanding of the rules is that they have until 10 June 2020 to furlough themselves, as they have to be furloughed prior to 1/7/20 and the furlough period is a minimum of 3 weeks. For the last 3 weeks of June, they’d have to do NO WORK for their company at all, other than training and statutory obligations, i.e. no chargeable nor marketing work etc. Then they could move onto the flexible furlough from 1/7/20 to work say 50:50 and claim furlough for half their usual working hours.

The furlough scheme will then be phased out during September and October as follows:-

From August, the furlough scheme will no longer cover employers NIC nor employers workplace pension contributions.

From September, the 80% furlough will reduce to 70%.

From October, the 70% furlough will reduce to 60%

Official guidance notes/announcement is linked here.

Re-starting your business

Now that we’re slowly coming out of lockdown, it’s time to start to plan re-starting your closed business.

Whilst many small businesses could legally have stayed open throughout the lock-down, many closed, either because of social distancing (staff and/or customers), owners shielding, lack of customers, lack of suppliers, or shielding staff. Other small businesses have stayed open throughout, having been able to make changes pretty quickly at the outset.

Many businesses have already re-opened, albeit in a smaller or different way, such as restaurants offering a takeaway service or shops which are only taking telephone orders. As restrictions are lifted, more suppliers re-open and more potential customers are out and about again, more and more small businesses will be planning to re-open over the coming weeks.

Re-starting sooner rather than later (in a safe way) will help you in the longer term. You really don’t want to stay closed when your competitors are open, and the longer you stay closed, the more likelihood of your regular customers forgetting about you, changing their buying habits, etc.

There are plenty of resources on the internet about necessary safety precautions for customers and staff, social distancing, alterations to premises, etc which I don’t want to repeat. A good starting point is the website.

What I want to talk about in this post is the “financials” of re-starting.

First thing to think about are the costs of alterations to your premises, i.e. social distancing signage, temporary screens, new equipment, fixtures or fittings that you may need, etc. You should be eligible for tax relief on such costs, either as an expense against income or via capital allowances.

Secondly, are other incidental costs, such as cleaning/hygiene supplies for yourself, staff and maybe customers. Also in this heading, I’d include advertising and marketing costs relating to your re-opening, such as social media or local printed media advertising, development of a new website or app (maybe for online/advance ordering), etc. Likewise, these would normally be eligible for tax relief by reducing profits.

Thirdly, most closed businesses will have made a loss over the period of closure and re-starting. For some who’ve received government grants and support (which are taxable), the receipt of government help will reduce your losses, or maybe even turn a loss into a profit. If your losses are severe and you end up with a loss for the full tax year, then relief can be claimed against profits or prior or future years.

Finally, you need to think about “modelling” the finances of your re-start. Most business won’t be able to return quickly to “normal” as they’ll be re-starting on reduced working hours, or reduced product range, or they simply won’t be able to serve the same number of customers due to social distancing. You need to be realistic about your likely sales revenue in the first few weeks and months of re-starting.

From your sales forecasts, you can estimate your “direct costs”, i.e. costs of raw materials or stocks you need to make those sales. Then you can also think about what staffing you need to service those sales. If you’re open fewer hours and serving fewer customers, you may need fewer staff or you may need them for fewer hours, This ties in with recent announcements about the flexibility of the furlough scheme where part time working is to be allowed from August. Finally, your other expenses – break them down into fixed costs and variable costs. Again, some elements, such as bank charges, power, vehicle running costs, etc., may be a lot lower than usual due to the reduction in business activity.

Once you have all these figures, you can see how much profit or loss you may make in the first few weeks. This highlights whether your reserves are adequate or whether you may need to apply for a loan from one of the Govt schemes, such as their bounce back loan scheme. It may also highlight that with reductions in costs due to lower trading activity (such as fewer staff hours) you may actually make more profit (or make a smaller loss) than you’d have expected from much lower sales.

If any clients wish us to help them with their financial modelling or help with preparing cash flow forecasts or budgets, then I’ll be delighted to help.

On a related subject, if you’re current VAT registered, then the temporary closure of your business and a slow re-start over many weeks could mean that you’re eligible for de-registration from VAT, which may be helpful for your finances if your customers are mostly domestic customers (such as a shop).

New ‘top-up’ grants available for left-out firms

The government has made an extra £617m available to a range of businesses not previously covered by business rates holidays or support grants.

The new discretionary ‘top-up’ fund caters for small businesses with ongoing fixed property costs. The kinds of businesses that may now qualify for help include those in shared workspace offices, regular market traders and small charities, along with bed and breakfasts that pay council tax rather than business rates.

To receive the grants businesses must have fewer than 50 employees and be able to show a significant drop in income due to coronavirus restriction measures.

The maximum grant size will be £25,000, with an option for £10,000 or other payments depending on local circumstances, the Department of Business Energy and Industrial Strategy said.

Local authorities will have full discretion to allocate funds and make payments to other businesses not specifically mentioned in guidance if need be.

As of the time of writing, no further details are available as to how to claim nor when claims will be paid, so, it’s another case of “wait and see” pending further announcements. You may wish to keep checking your local authority website or email them to ask for more details.

HMRC Webinars for Self Employed Income Support Scheme

HM Revenue & Customs are running webinars on applying for the Self-employed Income Support Scheme #SEISS, you can sign up here:

ICPA Update re Self Employed Support Grant

A short YouTube video from the ICPA giving details of how the self employed can check and claim their self employed support grant

As you’ll see from this video, the self employed must make their own claims via their own personal Government Gateway/Personal Tax Account, and that HMRC are not providing any facility for accountants to do it, nor are they allowing accountants to use their clients personal tax account login details!

The Forgotten

The ForgottenLtd

These are the faces of the small businesses owners shut out of Government support packages all across the UK. Our thanks to Lee Climpson and Transmission Productions for producing this powerful film

Posted by ForgottenLtd on Thursday, 30 April 2020
A video to try to put pressure on the government to provide support to those business owners who have fallen through the cracks (credit Forgotten Ltd)

Covid 19 – Bounce Back Loan Scheme Announced

Small businesses will benefit from a new fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders, the Chancellor announced today (Monday 27 April).

Rishi Sunak said the new Bounce Back Loans scheme, which will provide loans of up to £50,000, would help bolster the existing package of support available to the smallest businesses affected by the coronavirus pandemic.

The scheme has been designed to ensure that small firms who need vital cash injections to keep operating can get finance in a matter of days, and comes alongside the £6 billion awarded in business grants, supporting 4 million jobs through the job retention scheme and generous tax deferrals supporting hundreds of thousands of firms.

The government, which has been consulting extensively with business representatives about the design of the new scheme, will provide lenders with a 100% guarantee for the loan and pay any fees and interest for the first 12 months. No repayments will be due during the first 12 months.

The loans will be easy to apply for through a short, standardised online application. The loan should reach businesses within days- providing immediate support to those that need it as easily as possible.

Covid 19 – Self Employment Income Support Scheme

Use this scheme if you’re self-employed or a member of a partnership in the UK and have lost income due to coronavirus (COVID-19). This scheme DOES NOT apply to those trading via a limited company.

This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 a month. It will be available for 3 months, but may be extended.

The grant will be subject to Income Tax and National Insurance contributions but does not need to be repaid.

You can make a claim for Universal Credit while you wait for the grant. You should record the grant as part of your self-employment income, and it may affect the amount of Universal Credit you get. This will not affect Universal Credit claims for earlier periods.

If you receive the grant you can continue to work or take on other employment including voluntary work.

The online service you’ll use to claim is not available yet. HMRC will aim to contact you by mid May 2020, and will make payments by early June 2020.

Who can claim

You can claim if you’re a self-employed individual or a member of a partnership and you:

  • have submitted your Self Assessment tax return for the tax year 2018 to 2019
  • traded in the tax year 2019 to 2020
  • are trading when you apply, or would be except for coronavirus
  • intend to continue to trade in the tax year 2020 to 2021
  • have lost trading profits due to coronavirus

You will need to confirm to HMRC that your business has been adversely affected by coronavirus. HMRC will as usual use a risk based approach to compliance.

You will only be able to claim using the GOV.UK online service. If you receive texts, calls or emails claiming to be from HMRC, offering financial help or a tax refund and asking you to click on a link or to give personal information, it is a scam.


We will continue to support our clients by email and online systems, but for the foreseeable future, our office is closed and we are working from home. Please allow a little extra time for us to respond to your queries as lots of clients are asking for our help at the moment.

15/4/20 HMRC have updated their guidance re Furlough which now show the qualification date has changed from 28 February 2020 to 19 March 2020 so the scheme will now include workers who had a payroll data reported to HMRC up to 19 March 2020. It also confirms that firms can temporarily re hire workers who left after 20 February 2020 in order to pay them under the furlough scheme. Unfortunately no change in the Government’s stance that directors of single person companies can only furlough themselves if they do NO chargeable or productive work for their company, so they have to “moth ball” their company to claim furlough, and that the 80% furlough continues to be on PAYE salary only and not dividends.

8/4/20 A template for an agreement to temporarily send home an employee because there’s no work (‘furlough’). Free to download and use from the ACAS website.

8/4/20 Businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.

4/4/20 HMRC have updated the position of directors who furlough themselves on the website – directors are not allowed to “do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company” so that basically limits to them basic company administration duties etc. Still restricted to 80% of wages paid under PAYE and nothing based on dividends.

4/4/20 If you are not sure whether your business has a rateable value or not, check on here ( webpage). Then check with your local council to make sure they know you are at that address. Obviously if you know you’ve got a rates bill (or SBRR) you don;t need to. This is for those who are unsure.

3/4/20 The lack of clarity from HMRC is continuing to cause anxiety and stress for small businesses. As an example of how little information is being provided, this is the HMRC compliance handbook section re Covid-19 – “This content has been withheld because of exemptions in the Freedom of Information Act 2000”. How helpful is that??

2/4/20 Advice on Furlough from the Chartered Association of Certified Accountants (ACCA)

2/4/20 Advice from ACAS re CoVid19.

2/4/20 Further advice from The Institute of Chartered Accountants confirming their opinion that directors can furlough themselves

1/4/20 Furloughed Limited Company Directors – It would appear that HMRC are back-tracking on their initial guidance that limited company directors could only furlough to claim 80% of their PAYE wages if they did absolutely nothing for their company, i.e. make it officially dormant. Now, Martin Lewis (financial journalist) is saying he’s had confirmation from HMRC that they will allow company administration work as long as the director isn’t generating income nor providing services to their customers/clients. Whilst obviously this would be welcome news, we still have to wait for official confirmation from HMRC.

31/3/20 Those who feel left behind by the self-employed income protection scheme can send an outline of their situation to to help FSB feed in as wide a range of examples to the government as possible.

Are you SELF EMPLOYED, I’ve bashed out a quick briefing on the new Coronavirus Income Support scheme – who qualifies, freelance issues, agency workers, limited companies and more.Now including subtitles… NOTE: I missed one point in the video, if your avg income's over £50,000 you can't get it.Feel free to share with anyone it is relevant for

Posted by Martin Lewis on Friday, 27 March 2020
A good summary of help for self employed from Martin Lewis (Money Saving Expert)

FreeAgent have produced a summary of self employment income support scheme for sole traders and business partners.

Here is a petition requesting that small limited company directors are treated the same as the self employed and the employed.

The ICAEW have also published furlough guidance which explains how the 80% job retention scheme may apply to limited company directors. It is also suggesting that directors will be entitled to 80% of their wages paid via payroll/PAYE scheme as at February 2020, only if they do absolutely no work at all for their company (extending to no administration, marketing etc), and that they’ll get no support based on dividends drawn. Obviously, it’s only current interpretation of the guidance/detail issued so far, and like all things related to Covid19 changes and confirmations are expected in due course. has now publshed detailed guidance on the Job Retention Scheme. This confirms that eligible employees can not undertake work for or on behalf of the organisation. This includes providing services or generating revenue – this would appear to prevent a director from performing administration work or marketing etc.

The Government’s Self Employment Income Support Scheme has now been announced. This applies only to sole traders and partners in businesses, NOT to those trading through their own limited companies (see the furlough scheme mentioned above). Guidance states that HMRC will contact the self employed in due course who they think are eligible to claim, but it could be June before payments are made.

SCAM WARNING: Looks like the scammers are active at the moment – lots of people reporting receiving emails and texts purporting to be from HMRC or Govt telling people they’re due a refund or grant and asking you to click a link to claim. Please follow long standing advice NOT to click on any links in unexpected emails nor texts, and certainly don’t enter your bank details etc. If you think you’re due a refund or grant, make a claim via the official or local authority website.

Business Grants – for those businesses occupying commercial premises who are eligible for small business rates relief, our local council, Lancaster City Council, now have a webpage for you to enter your business bank details in order that your grant can be paid directly when funds start to flow. If you’re not in the Lancaster City Council area, I’m sure other local authorities are doing the same, so please check your own local authority website.

ICPA Covid19 Update – ICPA have put together this update with as many useful links as possible, and those links will refresh every time you use them. We’ve also some articles which we hope you will find useful.

Summary of measures announced to help small businesses from FreeAgent

Further businesses and premises to close Restaurants, cafes, pubs, hair & beauty, car showrooms, hotels, B&Bs are instructed to close. Food shops, pharmacies, petrol stations, home & hardware shops, laundrettes, garages, pet shops, corner shops, newsagents are allowed to stay open for the time being.

A full range of business support measures have been made available to UK businesses and employees.

Article from The Guardian – As it stands on the morning of 23rd March the hoped for intervention by the government on behalf of the millions of Self-employed we all, I believe, hoped for has not happened. That is not to say it won’t but at the moment
it has not and here is the best article that spells out what little is available to them. 

TAX TV YouTube Video – Government Help in relation to CVID-19

GOV.UK Latest – Support for businesses

GOV.UK Latest – Guidance for employers

New HMRC helpline launched to help businesses concerned about paying their tax due to coronavirus (COVID-19).

ACCA Factsheet – Claiming SSP for a SME self-employed director

ACCA Factsheet – Immediate support for SMEs

ACCA Factsheet – What is the priority for employers?

For local clients, Lancaster City Council has allocated £2million in emergency funding to support the district’s most vulnerable people and struggling local businesses. Any small businesses that have not already done so should register with the council’s economic development team by email to, for details of the financial support packages that are available to them.

How to ask Companies House to extend your filing deadline if an unplanned event stops you filing your accounts.