Please note, this article is applicable to self-employed people only. If you trade through a Limited company you cannot claim this grant. However, you may know people for whom this may be relevant. Here at Kirkwood Wilson, we want to keep you fully updated on all coronavirus support schemes.
The UK Government has extended the support available under the Self-Employment Income Support Scheme (SEISS) for self-employed people affected by coronavirus (COVID-19). A third grant will cover the period from 1 November 2020 to 29 January 2021. If you’re eligible, you’ll be able to claim the third grant at any time from 4 December 2020 to 29 January 2021.
The rules on who is eligible to claim are different to those for the previous SEISS grants. However, you still need to have submitted a Self Assessment tax return for the tax year 2018 to 2019 showing self-employment income in order to claim (unless one of the existing exceptions applies).
This article informs you all about claiming the third grant. A fourth grant will also be available from February 2021 to April 2021. We’ll tell you more about that nearer the time, including how much it will be and the rules for claiming.
How much is the third grant?
The third grant will be based on 80% of three months’ average trading profits, paid out in a single taxable instalment capped at £7,500.
Am I eligible to claim?
To make a claim for the third grant, you must meet a number of conditions, and make an honest assessment about whether you reasonably believe your trading profits will be significantly reduced due to coronavirus.
As previously, the third grant will also be subject to Income Tax and self-employed National Insurance and must also be reported on 2020 to 2021 Self Assessment tax returns.
As before, to make a claim for the third grant, you must:
- Be self-employed or a member of a partnership. You cannot claim the grant if you trade through a limited company or a trust
- Have traded in both the tax years 2018 to 2019 and 2019 to 2020.
- Either be currently trading but are impacted by reduced demand, or have been previously trading but are temporarily unable to do so due to coronavirus
- Declare that you intend to continue to trade, or restart trading, and reasonably believe that the impact on your business will cause a significant reduction in 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) does not make a business eligible for the third SEISS grant.
When deciding whether the reduction is significant, you’ll need to consider your wider business circumstances.
HMRC expects you to make an honest assessment about whether you reasonably believe that your trading profits will be significantly reduced compared to what you would otherwise expect to achieve during this period.
Your business must have been impacted on or after 1 November 2020, and you must keep evidence that shows how your business has been impacted by coronavirus, resulting in reduced activity, capacity or demand, or a temporary inability to trade.
How do I claim?
If you’re eligible for the third grant, you can claim on GOV.UK at any time from 4 December 2020 to 29 January 2021, by searching ‘Self-Employment Income Support Scheme Grant Extension’.
Making a claim online is easy using your Government Gateway account. You can do it on a smartphone and it only takes five minutes. If you’re unable to claim online, or feel you would like more support, you can call the HMRC helpline on 0800 024 1222. It may take longer to complete your claim over the phone.
You don’t need to work out your grant, HMRC will do that for you. Once you’ve submitted your claim (confirming that you meet the eligibility criteria) HMRC will use the information in your previous tax returns to calculate the grant you’re entitled to. They will then pay the money directly into your bank account within six working days.
As always, if you need any help at all, please don’t hesitate to get in touch and contact our Tax Department on 01704 546000, and we will help wherever we can. Please be aware though that you must make this claim yourself, we are unable to do this for you.