The Self-Employment Income Support Scheme (SEISS) allows eligible individuals to claim a taxable grant worth 80 per cent of their average monthly trading profits, paid out in a single instalment covering three months, and capped at £7,500 in total. This scheme is intended to support individuals who rely primarily on their trading profits from self-employment and who have been adversely affected by COVID-19.
The self-employed are a very diverse population. They have a wide mix of turnover and profits, with monthly and annual variations even in normal times. The SEISS is based on trading profits, as providing support on the basis of an individual’s past turnover would be unfair. For example, an individual could have had a high turnover, but have made a loss. A turnover-based system would provide more support to such an individual than to an individual with a lower turnover who made a profit.
More information about how income and trading profits are calculated can be found at www.gov.uk/guidance/how-hmrc-works-out-total-income-and-trading-profits-for-the-self-employment-income-support-scheme.