The Self-employment Income Support Scheme (SEISS): its legacy

The Self-employment Income Support Scheme (SEISS) was the government's main financial support for self-employed people whose income collapsed during the coronavirus pandemic. It paid taxable grants directly to self-employed individuals, with the first grant worth 80 per cent of average monthly profits over the preceding three tax years, up to a maximum of £7,500¹. The Office for Budget Responsibility recorded that the peak number of self-employed people supported by the scheme was the 2.6 million who received the first grant¹.

The scheme is now closed. The fifth and final grant closed to claims on 30 September 2021, and no new claim can be made for any of the five grants. What remains live is the aftermath: the grants were taxable and had to be reported on Self Assessment returns, and HMRC has said it expects to recover any SEISS payments people were not eligible for². If you were paid too much, telling HMRC yourself and paying the money back is a route that still exists³.

SEISS has closed: what that means now

The first thing most people arriving here want to know is whether there is anything left to claim. There is not. All five claim windows have shut, the last of them on 30 September 2021, and HMRC does not reopen them. The scheme ran as emergency support during the pandemic and was designed to end, not to become a permanent benefit.

Closure does not mean the scheme has no consequences today. Two things carry on. First, the tax: SEISS grants were taxable income and belong on the Self Assessment return for the year you received them, so if a grant was left off a past return, that return may need correcting². Second, the recovery of overpayments: HMRC's guidance states plainly that it expects to recover any SEISS payments people were not eligible for, and it has a process for people who realise they were paid too much to come forward and pay the grant back³.

It also helps not to confuse SEISS with similarly named schemes. The Self-Isolation Support Grant, a separate payment for people who had to self-isolate, has also closed, and Scottish Welfare Fund statistics note that outstanding awards of that kind are now being wound down⁴. SEISS was the much larger scheme for self-employed profits, and this page deals only with that.

If HMRC has contacted you about a SEISS grant, or you think a past return is wrong, the sections below set out how the grants were taxed, how overclaims are handled, and where you can challenge a decision you disagree with.

What SEISS offered: five taxable grants

SEISS made five grants in total, each with its own claim window, each taxable, and each paid directly to the self-employed person rather than through an employer. The Office for Budget Responsibility describes the first grant as "a taxable grant worth 80 per cent of average monthly profits for the self-employed over the preceding three tax years, up to a maximum of £7,500"¹. Later grants followed the same pattern of being calculated from average profits, with the details of each grant set when it was announced.

The scale of the scheme was unusual. The peak number of self-employed individuals supported by SEISS grants was the 2.6 million who received the first grant¹. That figure is the high-water mark: each later grant reached fewer people, as the economy reopened and eligibility rules were adjusted.

Each grant had to be claimed within its own window. HMRC contacted people who appeared eligible and told them when they could claim, but the claim itself had to be made before the window for that grant closed. Nothing was paid automatically to people who did not claim.

The fifth grant worked slightly differently from the earlier ones in one respect that still matters: the claim involved reporting your turnover, and HMRC's guidance on paying grants back specifically covers people who "made a mistake reporting your turnover in your claim for the fifth grant which means you are entitled to a lower grant than you received"³. A turnover figure that was too low could produce a grant that was too high, and that is one of the commonest reasons an overpayment arises.

Grant amounts: up to 80% of average profits, capped at £2,500 a month

The size of a SEISS grant was not a flat payment. It was worked out from your own trading history: 80 per cent of your average monthly profits over the three tax years before the scheme, subject to a cap of £2,500 a month, which produced the £7,500 maximum for the first grant, covering three months of trading¹. Someone whose average monthly profits were below the cap received 80 per cent of that lower figure, not the maximum.

Because the grant was a percentage of profits rather than a fixed sum, two self-employed people in very different trades could receive very different amounts, and someone with modest profits received a modest grant. The calculation used average profits over the preceding three tax years, so a single bad year or a single exceptional year was smoothed across the period¹.

The taxable nature of the grant matters here as much as the size. Unlike most welfare payments, which are not taxed, a SEISS grant was treated as business income and taxed through Self Assessment. That means the amount you kept was less than the amount paid, and the tax due depended on your other income in the year. The rules on how self-employed income is taxed and on income tax bands and rates explain how the grant sat alongside your other earnings when the bill was worked out.

Who could claim and how profits were worked out

Eligibility for SEISS turned on being genuinely self-employed with a trading history. The definition of gainful self-employment used in the benefits system gives a flavour of the test: the claimant is carrying on a trade, profession or vocation as their main employment, their earnings from it are self-employed earnings, and it is "organised, developed, regular and carried on in expectation of profit"⁶. A hobby that occasionally produces money, or a one-off transaction, does not meet that kind of test.

Profits were the measure throughout. In the benefits system, self-employed earnings are the net profit from the employment, normally calculated over the previous year⁷, and SEISS likewise looked at profit rather than turnover or gross receipts. That distinction matters for anyone who now has to revisit a claim, because the figures that determine entitlement are profit figures, after expenses, from the relevant tax years.

Self-employed people also interact with the National Insurance system on the strength of their profits. If profits are less than £6,845 a year, Class 2 contributions can be paid voluntarily to protect entitlement to benefits and the State Pension⁸. Where profits are later confirmed as at or above the small profits threshold, so that Class 2 becomes due automatically, those whose profits are subsequently confirmed as being at or above the threshold can apply to HMRC for a refund of what they paid voluntarily⁹. The guide to Class 2 National Insurance covers this in detail.

SEISS claimants were, in almost every case, people within Self Assessment, the system by which the self-employed report income and pay tax. HMRC's guidance on who must send a return includes people who made a profit when disposing of certain assets, for example shares or a second home¹⁰, and self-employed profits are the core reason most claimants filed. That is also why the grants were taxed through the return rather than at source.

How claims and payments worked

SEISS was not a scheme you were enrolled into. HMRC contacted people who appeared to be eligible, based on their Self Assessment history, and told them when their claim window for each grant opened. The claim then had to be made before that window closed, and once a claim was accepted, the grant was paid into the bank account HMRC held for the person, normally within about six working days.

The speed of payment was one of the scheme's practical strengths: once the claim was in, the money arrived quickly, without a separate application to a benefits office. But the same speed cuts both ways when something was wrong. A claim made on mistaken figures produced a payment just as fast, and the correction happens afterwards, through the tax system, rather than being caught at the point of payment.

The tax reporting followed a fixed timetable. Payments from the first, second and third SEISS grants, received on or before 5 April 2021, should have been included on the 2020 to 2021 Self Assessment return². Grants received later belong on the return for the tax year of receipt. If a grant was missed off the correct return, HMRC's guidance on checking whether you need to change your Self Assessment return for SEISS is the place to start, because an amended return is usually how the position is put right².

SEISS and benefits: Universal Credit, New Style JSA and ESA

A SEISS grant was income, and income affects means-tested benefits. Because the grant was part of self-employed earnings rather than a non-taxable welfare payment, it counted when benefits such as Universal Credit were worked out, and it had to be reported as income for the period it covered. Anyone who claimed Universal Credit while receiving a grant needed to make sure the payment was declared in their assessment.

The benefits landscape around that time was also shifting. Tax credits have now ended¹², and working-age support runs through Universal Credit and the newer contributory benefits. One point that catches people out is that these contributory benefits can be claimed alongside Universal Credit: the claim form guidance states that "you may be eligible to claim New Style ESA at the same time as Universal Credit"¹³. New Style Employment and Support Allowance is based on National Insurance contributions rather than savings or income, so a SEISS grant does not reduce it in the way it reduces means-tested benefits. The basic allowance, standard rate, is up to £95.55 a week in 2026/27¹⁴.

For homeowners struggling with mortgage costs, separate help exists. You can get help with your mortgage interest payments through Support for Mortgage Interest (SMI), which is offered as a repayable loan¹⁵. SMI is usually paid directly to your lender, with no lump sum, no credit check and no fees to set up¹⁶. It is not a grant, and it is repaid when the home is sold or transferred, but it is support that exists independently of any coronavirus scheme.

The wider guide to benefits in the UK sets out what is available now, and the page on tax credits and how they ended covers what replaced them.

Tax on SEISS grants and when HMRC can recover them

SEISS grants were taxable, and the tax was collected through Self Assessment in the normal way. The grant added to your income for the year of receipt, so the tax due depended on your total income and the band it fell into. In Scotland, income tax rates are set by the Scottish Parliament, but the tax is still collected by HMRC and paid to the Scottish Government via HM Treasury¹⁷, so a SEISS grant received by a Scottish taxpayer was reported and paid for through the same Self Assessment process, with Scottish rates and bands applied.

This treatment is worth contrasting with some other government payments, because it was not universal. Compensation under the Horizon Convictions Redress Scheme, for example, is exempt from Income Tax, Capital Gains Tax, National Insurance contributions, Corporation Tax and Inheritance Tax¹⁸. SEISS grants had no such exemption: they were fully taxable business income.

The harder question is what happens when a grant was overclaimed. HMRC's guidance is direct: "We expect to recover any SEISS payments you were not eligible for"². That expectation is aimed in particular at people who received SEISS payments without submitting a self-employment or partnership page with their return, but the principle of recovery applies to any payment made to someone who turns out not to have been entitled to it.

There are two routes to a recovery being sorted out:

1. You come forward yourself. HMRC's guidance on telling it and paying the grant back covers situations including where you made a mistake reporting your turnover in your claim for the fifth grant which means you are entitled to a lower grant than you received³. Telling HMRC voluntarily is the route that exists for anyone who has realised the position is wrong.
2. HMRC opens a compliance check. Where HMRC suspects an overpayment, it can investigate and pursue recovery. The page on undeclared income and how far back HMRC can go explains the framework, and the comparison of HMRC internal review and the tax tribunal explains how to challenge a decision you think is wrong.

If you disagree with HMRC's conclusion, you are not limited to accepting it. A decision can be challenged through HMRC's internal review process and then the tax tribunal, and there is a separate route for complaining about HMRC where the issue is service rather than the decision itself. Free, impartial help is available: HMRC's own guidance is the starting point, and the pages on Self Assessment and on claiming a refund when you have overpaid income tax cover the mechanics of correcting a return.

SEISS income and mortgage applications

A question that outlived the scheme is how lenders treat SEISS grants when someone applies for a mortgage. The core difficulty is that a SEISS grant was temporary emergency support, not ongoing earnings, so it is not the kind of income an affordability assessment is built on. Lenders assess mortgages on sustainable income, and a one-off pandemic grant does not predict future earnings.

Where a government scheme does set a hard rule, it is about the size of the loan rather than the source of income. Under the Help to Buy shared equity loan scheme in Wales, the remaining balance must be financed through a mortgage which is not in excess of 4.5 times the applicant's household income¹⁹. That cap shows the order of magnitude lenders and scheme rules work with when income is converted into borrowing capacity.

For self-employed applicants generally, the evidence a lender wants is a trading history: accounts, tax returns and, often, HMRC documentation. Because SEISS grants were reported through Self Assessment, a grant appears in the tax figures for the relevant year, and an applicant may need to explain it as a temporary item rather than recurring income. The guides to mortgages and to buying a home cover how affordability works and what evidence the self-employed are asked for.

Homeowners who fell behind on mortgage payments during the pandemic had a separate option in Support for Mortgage Interest, the repayable loan paid directly to the lender with no fees to set up¹⁵. That help was never part of SEISS and is not tied to it, but it is the relevant support for anyone whose difficulty is the mortgage itself rather than lost trading income.