08 Jul 2020
Many Self Employed people have already made their first SEISS claim so this is just a final reminder for any stragglers out there.
Unfortunately not all Self Employed are eligible to make a claim, the main barriers being:-
1) Self employed income must constitute more than 50% of total income so this prevents people with large amounts of rental income, pension income etc from claiming.
2) Self employed income must average below £50,000 per year.
The good news is that a second SEISS grant is to be made available, still subject to the above restrictions, and most people who were eligible for the first will be eligible for the second.
Full details below:-
Businesses eligible for the first Self-employment Income Support (SEISS) grant must make their claim by Monday 13 July.
When applications for SEISS grants opened in mid-May, HMRC did not specify any deadline for claims – the deadline of 13 July 2020, announced when the scheme was extended, is now approaching and claims for the first grant must be made by this date.
Businesses must have been adversely affected by coronavirus when they claim the grant. This means that, to claim the first grant, the business must have been adversely affected on or before 13 July 2020 and to claim the second grant they must have been adversely affected after that date.
HMRC’s guidance on making a claim, says: “Do not make a claim based on an adverse effect you think may happen in the future.” It also reassuringly states: “If your business recovers after you’ve claimed, your eligibility will not be affected”.
ICAEW’s Tax Faculty advises that businesses should judge their eligibility based on their circumstances in the period up to the date the claim is made and keep evidence to support that judgement.
The view that the first grant relates to March to May 2020, as mentioned in the original announcement by the Chancellor, has persisted although this aspect of the policy had been dropped by the time the direction was published on 30 April.
HMRC has confirmed to the Tax Faculty, that in relation to the periods covered by SEISS:
- The SEISS grants do not relate to any particular periods or seek to replace lost income over a particular period.
- SEISS is not intended to provide a month-by-month replacement of income.
- SEISS provides a lump sum payment to support eligible self-employed individuals whose businesses have been adversely affected by coronavirus. The sum is calculated by reference to three months’ average trading profits.
- Individuals can receive the full grant under the SEISS while continuing to work as long as their businesses have been adversely affected at the date of claim.
HMRC updated its SEISS guidance on 2 July 2020, expanding the guidance on adversely affected and the examples. The revised guidance provides further clarification on amended rules for new parents and reservists. It also explains that claims for the second grant will open from 17 August 2020 (probably on a staged basis) and close on 19 October 2020.