SEISS: Due to ‘volatility’ of self-employed income, support could not be offered month by month

Due to the ‘volatility’ of self-employed income and a lack of granular data held around trading profits, support for taxi drivers and other self-employed workers could not be based on a month by month basis, says Treasury Secretary.

Instead, the Government have opted to provide a lump sum figure, via the Self-Employment Income Support Scheme (SEISS), to help workers financially affected by the coronavirus pandemic.

So far over £33billion has been paid out to self-employed workers via SEISS grants.

One senior Treasury official has also recognised that it is currently a ‘challenging time’ for self-employed taxi drivers.

Zarah Sultana, Labour MP for Coventry South, asked the Chancellor of the Exchequer: “What steps he has taken to support self-employed taxi drivers experiencing reductions in work as a result of the COVID-19 outbreak and who require financial support to bridge the gaps between receipt of Self-Employment Income Support Scheme grants."

Jesse Norman, the Financial Secretary to the Treasury, replied to the written question: “The Government recognises that this is a challenging time for many sectors and individuals, including self-employed taxi drivers.

“The Government has acted to support those that are self-employed and have been affected by the COVID-19 outbreak, and announced at Budget 2021 that the Self-Employment Income Support Scheme (SEISS) will continue until September, with a fourth and a final fifth grant.

“The Government will have spent over £33 billion supporting those in self-employment through the SEISS, making it one of the most generous self-employment income COVID-19 support schemes in the world.

“The SEISS is not intended to provide a month-by-month replacement of income. Due to the volatility of self-employed income and the lack of granular data that HMRC holds on self-employed trading profits, precise mapping of income replacement month by month is not possible.

“Instead, the SEISS provides a lump sum payment to support eligible self-employed individuals whose businesses have been affected by coronavirus.

“The SEISS is just one part of a wider package of support for the self-employed, which includes automatic, self-serve time-to-pay arrangements, loans, welfare support, and other business support grants.”

For taxi drivers and other eligible self-employed workers throughout the UK, the Government's financial SEISS package has been a lifeline for both individual workers and their families.

The fourth SEISS grant will provide a taxable grant calculated at 80% of 3 months’ average trading profits. The grant will be paid out in a single instalment and capped at £7,500 in total.

Applications for the much anticipated fourth SEISS grant will be open next week until 31 May 2021. Those eligible for the grant will be contacted directly by HMRC and provided with a personal claim date. Eligible workers will then be able to submit their claims for the fourth grant from the date provided by HMRC.

In previous application rounds, HMRC has been able to turn around SEISS claims within just six working days from a claim being successfully submitted.

The Chancellor Rishi Sunak also announced a fifth and final SEISS grant will be made available to help those struggling. The UK Government said the final grant will cover May to September.

Eligible self-employed workers will be able to claim from late July and the amount of the fifth grant will be determined by how much the claimant's turnover has been reduced in the year April 2020 to April 2021.

The fifth grant will be worth:

  • 80% of 3 months’ average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more

  • 30% of 3 months’ average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%.