With applications now open for the third Self-Employment Income Support Scheme (SEISS) grant, HMRC says it is contacting those it believes may be eligible to receive funds.

The third grant will be based on 80% of three months’ average trading profits and will be paid in a single taxable instalment capped at £7,500.

The grant will cover the period from 1 November 2020, to 29 January 2021 and claims can be made at any time in between these two dates.

Since the amount is subject to Income Tax and self-employed National Insurance, it will need to be reported on 2020-21 self-assessment tax returns which are due by 31 January 2022.

Before claiming, it is important to note this time around that some of the eligibility criteria has changed.

As previously, claimants must be self-employed or a member of a partnership and must have traded in both the 2018-19 and 2019-20 tax years.

In addition, claimants must also now:

  • Either be currently trading but are impacted by reduced business activity, capacity or demand, or have previously been 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 of coronavirus on their business will significantly reduce their trading profits; and,
  • Only claim if the reduction in profits is caused by reduced business activity, capacity or demand, or inability to trade due to coronavirus. Increased costs does not confirm eligibility.

This means that the onus is very much on the claimant to make an honest judgement about whether they reasonably believe that their profits will be significantly reduced, taking into consideration their wider business circumstances.

The claimants business must have been impacted on or after 1 November 2020 and those applying for support must be able to produce evidence that illustrates the impact of coronavirus on their business.

There is more information and examples on the GOV.UK website, to help you to determine your eligibility.

How can George Hay help?

If you’re concerned about your eligibility for the next round of SEISS funding, or you have questions about the tax consequences of accessing this support, contact us today.

Information is correct at time of writing (02/12/20).

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