Introduction
As part of the Winter Economy Plan, the Chancellor of the Exchequer, Rishi Sunak, had announced an extension to the Self Employment Income Support Scheme (SEISS). There was to be a lump sum to cover November to January next year, worth 20 per cent of average monthly profits, capped at £1,875. There was also to be a second grant for February to April 2021 of an unspecified value.
As a result of pressure at the end of last month, the amount available under SEISS under the two forthcoming self-employed grants was increased from 20 per cent to 40 per cent, meaning the maximum grant would have increased from £1,875 to £3,750.
Once again events seem to have overtaken the Treasury and the provisions of the SEISS scheme have been amended in light of the one-month lock down starting today.
How SEISS will look from this month
The extension will still last for six months, from November 2020 to April 2021 and grants will be paid in two lump sum instalments each covering a three-month period.
The first grant will cover a three-month period from 1 November 2020 until 31 January 2021. The Government will provide a taxable grant covering 55% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £5,160 in total.
The grant will be increased from the previously announced level of 40% of trading profits to 80% for the month of November 2020. This therefore increases the total level of the grant from 40% to 55% of trading profits for 1 November 2020 to 31 January 2020.
The Government are providing broadly the same level of support for the self-employed as is being provided for employees through the Coronavirus Job Retention Scheme in November due to its extension. And then the Job Support scheme in December and January.
The second grant will cover a three-month period from 1 February 2021 until 30 April 2021. The Government will review the level of the second grant and set this in due course.
The grants are taxable income and also subject to Class 4 National Insurance contributions.
Eligibility
The eligibility for the SEISS scheme remain unchanged, being open to both the self-employed and members of trading partnerships.
To be eligible for this grant extension self-employed individuals, including members of partnerships, must:
- have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
- declare that they intend to continue to trade and either:
- are currently actively trading but are impacted by reduced demand due to coronavirus
- were previously trading but are temporarily unable to do so due to coronavirus
HMRC have confirmed the following WOULD constitute being “adversely affected”:
If you’re unable to work because:
- You’re shielding.
- You’re self-isolating.
- You’re on sick leave because of coronavirus.
- You have caring responsibilities because of coronavirus.
You’ve had to scale down or temporarily stop trading because:
- Your supply chain has been interrupted.
- You have fewer or no customers or clients.
- Your staff are unable to come in to work.
It is also worth noting that as far as the law is concerned, it does not actually matter if you need the money or not. While most people who claim will need it, and need it badly, the Treasury Direction makes no mention of needing the money as a rule for accepting it.
How to claim
As before, claims will be made on-line via a dedicated HMRC portal. The next grant will be paid faster than previously planned, with the claims window opening on 30 November rather than the middle of December as previously announced.
SRC-Time are one of the South East’s leading accountancy firms in advising the self-employed and partnerships in all aspects of their tax affairs and we are able to assist in any issue raised above.
Our expert team is available to provide you with advice and can be contacted on 01273 326 556 or you can drop us an email at info@src-time.co.uk or speak with an account manager to get any process started.
