The Government is extending the Self-Employment Income Support Scheme (SEISS) for a further six months, though the grants available will be worth less than previous.
Originally, the third grant would have provided a taxable payment covering 20 per cent of average monthly trading profits, delivered in a single instalment covering 1 November 2020 – 31 January 2021 – capped at £1,875 in total.
In comparison, the first and second grants were worth up to 80 per cent and 70 per cent of the claimants monthly trading profit over the last three years (2016/17, 2017/18 and 2018/19), respectively.
However, in the weeks since the extension was first announced, the Government has been forced to recognise the severity of the financial difficulty that many self-employed individuals are still facing and that 20 per cent may not be sufficient.
It has subsequently confirmed that the third grant will increase from 20 per cent of previous trading profits, to 40 per cent of previous trading profits capped at £3,750. The level of the fourth grant, covering 1 February 2021 – 30 April 2021, will be set in due course.
The guidance published by HMRC, so far, explains that to qualify for the additional grants in the coming months, applicants must meet the following criteria:
- Be currently eligible for the SEISS (although it is not necessary to have claimed the previous grants);
- Declare that they are currently either actively trading or were previously trading but are temporarily unable due to Coronavirus, but intend to continue to trade in future;
- Declare that they are impacted by reduced demand due to COVID-19 in the qualifying period.
It has not yet been confirmed whether these criteria will amend or work alongside the previous SEISS eligibility requirements.
HMRC is expected to publish further guidance soon. We will aim to keep you updated when this information is released.
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 (26/10/2020). Please keep an eye on our dedicated Coronavirus page, and our Adapt, Rebuild & Recover Hub for the very latest news as we endeavour to cover the key issues affecting you and your business at this time.