Grants under Self Employed Income Support Scheme – SEISS 3

Applications have opened today for this.

The numbers involved are the same as for the first grant – based on the same year’s profits, with 80%, to a maximum of £7,500, available. To make a claim for the third grant, it is not necessary to have claimed before if you are eligible at this point. No new categories of taxpayer have been added as being eligible.

Taxpayers must meet a number of conditions, some of which are new. In particular, they must reasonably believe their trading profits will be significantly reduced between November and the end of January due to coronavirus and:

  • either be currently trading but are impacted by reduced business activity, capacity or demand, or have been previously trading but are temporarily unable to do so due to coronavirus
  • declare that they intend to continue to trade, or restart trading, and that they reasonably believe that the impact on their business will cause a significant reduction in their trading profits
  • only claim if the reduction in profits is caused by reduced business activity, capacity or demand, or inability to trade due to coronavirus – reduction in profits due to increased costs (such as having to buy masks, new technology or longer working hours) does not make a business eligible for this third SEISS grant.

HMRC ask claimants this time to make ‘an honest assessment about whether they reasonably believe their trading profits will be significantly reduced’ compared to what they would otherwise expect during November December January. They ask that taxpayers consider their ‘wider business circumstances’. There is no definition given of what ‘significant’ means here. For taxpayers who have other/new types of income, eg a different, salaried temporary job, it is ultimately a personal decision whether to claim or not.

HMRC’s SEISS helpline 0800 024 1222 is open  8am – 4pm weekdays.

Business must have been impacted on or after 1 November 2020 and claimants need to keep evidence of the impact (eg cancelled work). For taxpayers who are uncertain, my suggestion would be to wait until later in the claim window, which closes 29‌‌ January 2021, before deciding – by that point it should be possible to compare profits for those three months with those from a year ago. Proof of the impact of coronavirus (the figures themselves and cancellations or eg diary records) become part of taxpayers’ records for tax purposes.

As before, any amount claimed will be subject to income tax and national insurance in the return for the year to 5 April 2021.

There are some examples on‌‌ G‌‌‌‌O‌‌V‌‌.UK to help taxpayers considering whether they should be claiming‌‌ and claims can be made here:

https://www.gov.uk/guidance/claim-a-grant-through-the-self-employment-income-support-scheme 

A fourth grant is planned for February‌‌ 2021.

Grants under Self Employed Income Support Scheme – SEISS 3 November

There will be further amounts offered under SEISS through to spring of 2021.

At the moment, nobody whose previous profit figures ruled them out will qualify. (For example those with average profits over £50,000.)

Taxpayers who were eligible before may apply, but note that the questions will be different when the next application is made. In particular, there will be a question this time about whether there is less demand/fewer customers since March of this year, for businesses affected.

As before, anyone applying must read the questions carefully and ensure that the declaration is correct at the time it is made. Unless there are specific questions asking about future plans (eg intention to keep trading), SEISS grants are based on the situation at the time the boxes are ticked.

The next, third, claims open during the last week of November via Government Gateway. After several changes, on 5 November the Chancellor announced that the next amount will be 80% of the ‘test profits’, up to a maximum of £7,500. This is the same way that the first (spring 2020) amount was calculated. It is intended to assist during November, December and January. (Details of plans for a further grant expected for February to April 2021 have not been released yet.)

For any taxpayer who qualified before based on their figures, but did not claim, they can make this as their first claim under SEISS if they can now answer yes to all the questions in the declaration.

SEISS grants are part of taxable profits for income tax, but are outside the scope of VAT.

https://www.gov.uk/government/publications/self-employment-income-support-scheme-grant-extension/self-employment-income-support-scheme-grant-extension 

 

https://commonslibrary.parliament.uk/research-briefings/cbp-8879/ 

Extended payment deadlines for income tax

Taxpayers with payments on account due 31 July 2020 have already been allowed to delay payment until January.

The Chancellor has announced that there will now be a concession for payments due in January 2021, allowing later payment.

HMRC anyway runs a helpline to agree ‘time to pay’ arrangements. It may be that the new concession will mean payment can be delayed without the need for any formal agreement, possibly without interest being charged. I shall update on this as further details are announced.

 

Further grants under Self Employed Income Support Scheme

NOTE:

DEVELOPMENTS SINCE THIS WAS WRITTEN CAN BE SEEN IN MY NOVEMBER 2020 POSTS

The SEISS is being extended to two further payments.

The most recent (second) payment can be claimed until 19 October.

Following that, two further payments will be available to taxpayers who qualified for the previous payments, and based on the same past profits as before. The third grant will be 20% of those profits, to a maximum of £1,875, and will be available late autumn. The fourth grant planned for 2021 has not been outlined yet, but as support is generally being tapered off, I would expect this to be not more than the third amount.

Claims will be made via the same Gateway portal, and as before there will be questions to answer and a declaration to make, which must be true at the date the grant is claimed. All SEISS amounts received must be declared in that year’s tax return, and are subject to income tax and national insurance.

https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

Second Self-Employed Income Scheme

This opens today and runs until 19 October.

Details of who is eligible to claim are similar to before, but this time taxpayers are asked to consider whether their business has been adversely affected by coronavirus on or after 14 July 2020 (up to the date of claiming). The amount of the taxable grant is lower than before, 70% of relevant income, to a maximum of £6,570. Taxpayers who claimed a first amount and qualify to claim again can expect to receive 87.6% of the first amount they received.

Unfortunately there has been no move to extend eligibility to self-employed taxpayers who fall outside the original criteria, for example because they are newly trading, do agency work, or had profits averaging more than £50,000 per year.

Claims can be made by logging in here:

https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference

and taxpayers will need their

  • 10-digit tax reference (UTR)
  • National Insurance number
  • Gateway login details
  • Bank details

Claims are staggered, so the first login may bring up a message showing the earliest claim date as a day within the next week.

https://www.gov.uk/guidance/claim-a-grant-through-the-self-employment-income-support-scheme

Self-Employed Income Support 2 coming August

The Chancellor has announced a second and final taxable grant for some self-employed individuals.

This will be lower than the first by about 12.5%, and the maximum will be £6,570.

I assume that the qualifying conditions will be the same as before. This would mean that only those entitled to claim first time around will qualify again, and then only if their business is still adversely impacted during the period June to August 2020.

https://www.gov.uk/government/news/chancellor-extends-self-employment-support-scheme-and-confirms-furlough-next-steps