As announced by Chancellor Rishi Sunak on 24 September, the Government’s Self-Employed Income Support Scheme (SEISS) is being extended to ensure self-employed individuals can continue to receive vital funding throughout the ongoing COVID-19 pandemic.
Whilst the scheme will remain in place however, HMRC has confirmed that the eligibility criteria is set to change and the third and fourth grants will become less generous, making the scope for valuable support much narrower.
Eligibility criteria
According to HMRC’s factsheet (see here), to be eligible for the further grants, taxpayers must meet the following criteria:
– Be currently eligible for the SEISS (although it is not necessary to have claimed the previous grants)
– Be actively trading at the time the grant is claimed and intend to continue to trade
– Be impacted by reduced demand due to COVID-19 in the qualifying period
The qualifying period for the third grant runs from 1 November to the date of claim and the qualifying period for the fourth grant is expected to run from 1 February 2021 to the date of that claim.
The requirements to be “actively trading” and to be “impacted by reduced demand” are new adjustments to the scheme, and HMRC is expected to publish further guidance to clarify the meaning of these terms.
The requirement to be actively trading will mean that businesses that have had to close during the pandemic will not be able to claim if they have not already restarted during the qualifying period.
Grants
The grants will be based on the same tax years as the previous grants, which means information on 2019/20 self-assessment tax returns that have been filed will not be considered.
HMRC have confirmed that the third SEISS grant will provide a taxable sum calculated as 20% of average monthly trading profits paid out in a single instalment covering three months’ worth of profits, capped at £1,875. This level has been set so as to offer broadly the same level of government support that is being provided to employees through the Job Support Scheme (see our recent blog for more on this).
As far as we know, the level of the fourth SEISS grant remains under review and will be published in due course.
How to claim
We expect that HMRC will release further details of how to claim in the coming weeks, so please stay tuned on our hub for updates.
For further advice on anything in this article, or a discussion tailored to your situation, please contact your usual PM+M team member. Alternatively, feel free to get in touch with us at enquiries@pmm.co.uk and we’ll direct you to the best person.
This information is correct as of 30 September 2020. This blog is for general guidance only. Recipients should not act upon any of the information provided without seeking specific professional advice tailored to your circumstances, requirements or needs. Please contact PM+M before making any decisions based on any matters relating to this blog.
