Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment his Department has made of the suitability of the £50,000 annual trading profit threshold for determining an applicant's eligibility for the Self-Employment Income Support Scheme.

The Self-Employment Income Support Scheme (SEISS) helps those adversely affected by COVID-19. Individuals can at present claim a taxable grant under the SEISS worth 80 per cent of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £7,500 in total.

The extension of the SEISS announced by the Chancellor of the Exchequer on 29 May 2020 means that eligible individuals whose businesses are adversely affected by COVID-19 will be able to claim a second and final grant when the scheme reopens for applications in August. This will be a taxable grant worth 70 per cent of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total.

The SEISS, including the £50,000 threshold for average trading profits, is designed to target those who most need it, and who are most reliant on their self-employment income. The self-employed are very diverse and have a wide mix of turnover and profits, with monthly and annual variations even in normal times, and in some cases with substantial alternative forms of income too: for example, those who had more than £50,000 from trading profits in 2017-18 had an average total income of more than £200,000. Some 95 per cent of those with more than half their income from self-employment in 2018-19 could be eligible for this scheme.

Those with average trading profits above £50,000 may still be eligible for other elements of the unprecedented financial support package made available by the Government. These measures include Bounce Back Loans, tax deferrals, rental support, increased levels of Universal Credit, mortgage holidays, and other business support grants.