Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps his Department has taken to ensure that women who previously took maternity leave are not unfairly treated in their applications to the Self Employed Income Support Scheme.

The Government is aware that some people’s eligibility for SEISS was affected if they had taken time out of their trade while pregnant or to care for their new-born or newly adopted child, and so had not submitted a tax return for 2018-19 or had trading profits in 2018-19 that were less than their other income and were therefore ineligible for the SEISS.

Taking parental leave does not mean that the trade has ceased and should not therefore affect a person’s eligibility for SEISS if they intend to resume trading after the leave is taken.

In June 2020 the Government announced that HMRC would determine the eligibility and grant amount for people in this situation using either their 2018-19 self-assessment return or the average of their 2016-17 to 2018-19 returns. Claimants still had to meet the other standard eligibility criteria for support under the SEISS.

The Government has now announced a fourth and fifth round of SEISS. HMRC now have tax returns covering 2019-20, and will include these returns when calculating eligibility for the SEISS and the grant amount. The arrangements that ensured that people were not made ineligible for previous rounds of the SEISS as a result of parenthood have been replicated for the fourth and fifth rounds.

For those who had a new child in 19/20 which either affected their trading profits or total income or meant that they did not submit a Self-Assessment tax return in 2019/20, they may still be able to make a claim.

If new parents are in this position and are applying for SEISS 4, their eligibility will be determined based on either their 2018-19 self-assessment return or an average of their 2016-17 to 2018-19 returns, to determine both their eligibility and grant calculation. They will also need to meet the other standard eligibility criteria for support under the SEISS.

The amount of the SEISS grant is determined based on the applicant’s average profits from self-employment in the previous four tax years, as reported through their tax returns. By calculating the grant on a four-year average of profits, the SEISS supports individuals who may have had fluctuating profits for any reason and gives the best average of an individual's usual trading profits.