Self Employed Income Support Scheme – Fourth Grant

The fourth self employed grant

What period is the fourth grant for?

The fourth grant is for the three months from 1 February 2021 to 30 April 2021. The grant will be paid in one lump sum instalment.

How much is the grant?

The level of the grant will be reviewed and set in due course.

Who qualifies for the fourth grant?

To be eligible for the fourth grant, self-employed individuals, including members of partnerships, must:

  • have been previously eligible for the SEISS.
  • 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.

Can I claim the fourth grant if I didn’t claim the first, second or third ones?

Yes, you don’t need to have claimed the first, second or third payments to claim the fourth grant.  You do however need to meet the same eligability criteria for the first grant, so if you did not qualify for the first you will not qualify for the fourth.

When can I make my claim?

HMRC will provide full details about claiming and applications in guidance on GOV.UK in due course.

How do I make my claim?

HMRC will provide full details about claiming and applications in guidance on GOV.UK in due course.

Self Employed Income Support Scheme – Third Grant

The third self employed grant

 

What period is the grant for?

The third grant is for the three months from 1 November 2020 to 31 January 2021. The grant will be paid in one lump sum instalment.

How much is the grant?

The grant has been increased from the previously announced level of 40% of trading profits to 80% for November 2020. This increases the total grant from 40% to 55% of trading profits for the period 1 November 2020 to 31 January 2020.

The grant is capped at £5,160 in total.

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 reduced Job Support scheme in December and January.

Who qualifies for the third grant?

To be eligible for the third grant, self-employed individuals, including members of partnerships, must:

  • have been previously eligible for the SEISS.
  • 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.

Can I claim the third grant if I didn’t claim the first or second ones?

Yes, you don’t need to have claimed the first or second payments to claim the third grant.  You do however need to meet the same eligability criteria for the first grant, so if you did not qualify for the first you will not qualify for the third.

When can I make my claim?

The online service for the third grant has been brought forward from 14 December to the 30 November.

How do I make my claim?

HMRC will provide full details about claiming and applications in guidance on GOV.UK in due course.

Self Employed Income Support Scheme – Second Grant

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The Self-Employed Income Scheme (SEISS) was launched on 26 March 2020 by the Chancellor to help self-employed individuals with the financial effects of the Coronavirus lockdown.  More details about the scheme can be found here.

The scheme, as launched, consisted of one grant payable in May, covering the three months March, April and May.  A second grant was announced on 29 May 2020 and will be payable in August.

HMRC calculates the amount of the grant from your tax return data that it holds and invites you to make a claim.

The first grant is based on 80% of your average monthly profits over the last three years, capped at £2,500 per month. The second grant has been reduced to 70% of your average monthly profits over the last three years, to reflect a similar reduction in the employed ‘Furloughed Workers Scheme’.

  • The first grant covers the period from 1 March 2020 to 31 May 2020 and is worth up to £7,500
  • The second grant covers the period from 1 June 2020 to 31 August 2020 and is worth up to £6,570
  • You can apply for the first grant until 13 July. The first grant is worth 80% of your average monthly trading profits, paid in a single instalment covering three months’ worth of profits, up to a maximum of £7,500.
  • Applications for the second grant will open in August. The second grant is worth 70% of your average monthly trading profits, paid in a single instalment covering three months’ worth of profits, up to a maximum of £6,570.
  • Eligibility for both grants are the same, details about eligibility can be found here.  You will also need to confirm that your business has been adversely affected by coronavirus.
  • To be eligbile fro the second grant your business will need to have been adversly affected by the Covid19 restrictions from 14th July.
  • Some examples of how your business could have been adversley affected can be found in the HMRC guidance here.
  • You do not need to have claimed the first grant to claim the second grant.  For example, if your business has only been adversely affected by COVID-19 in this later phase, but not earlier in the pandemic.

You can check if you are eligible for the grant by using the HMRC online checker here.  If you disagree with HMRC’s decision, you can challenge it from within the tool.

Applications for the 2nd grant will open on 1 August.

The Chancellor has confirmed that there will be no other changes and no further extensions to the scheme.

If you claim the grant you can continue to work or take on other employment, including voluntary work.

Both grants are taxable and will need to be included on your tax return.

Coronavirus top up local business grant

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Coronavirus top up to business grant funds scheme

The Business Secretary has announced an extension to the previously announced Small Business Grant and Retail, Hospitality & Leisure Grants.

The additional funds are aimed at small businesses with on-going property related costs, that do not qualify for the other grants.

Local authorities are being asked to prioritise those businesses in shared spaces, regular market traders and small charity properties that do not meet the criteria for Small Business Rates Relief.  However, Local councils will have the discretion to make payments to other businesses based on local economic need.

To qualify, businesses must be small, under 50 employees, and be able to demonstrate that they have seen a significant drop in income due to the Coronavirus restriction measures.

There will be three levels of grant payments.  The maximum available will be £25,000.  There will also be grants of £10,000.  Local authorities have been given discretion to make payments of any amount under £10,000 to businesses in economic need and councils will be able adapt their approach to local circumstances.

Further guidance will be issued to local councils shortly.

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Self Employed Income Support Scheme – your questions answered

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We have been asked a lot of questions recently about how the Self Employed Income Support Scheme will impact our clients.  Here are some of the questions and answers:-

  • Are ‘trading profits’ pre or post farmers’ averaging relief?

We understand that HMRC will use the profit before farmers’ averaging relief to work out whether a person is eligible to claim the grant and how much grant they will receive.

  • Do property letting businesses qualify for the grant?

Property lettings businesses are not regarded as a trade so landlords will not qualify for the grant.

  • What is the position regarding Furnished Holiday Letting businesses, do they qualify?

For certain taxes Furnished Holiday Letting (FHL) businesses are considered a 'trade'.  However for the purposes of SEISS, we understand that FHL's will not qualify.

  • How will HMRC determine if trading profits have been lost as a result of the COVID-19 crisis?

You will need to sign a declaration to confirm that your business has been adversly affected by the coronavirus outbreak.  We undertand that HMRC will use a 'risk based' approach to check compliance with the scheme.  This is likely to involve checking turnover and/or the profits reported on previous tax returns and comparing them with those reported in 2020/21.

  • How are losses dealt with under the scheme?

In-year losses will be taken into account as well as profits when calculating your eligibility for the grant and the amount of the grant that you will receive.

2016-17 2017-18 2018-19 Total 3 year average
Trade profit          50,000          50,000 (10,000)            90,000                  30,000
Other Income -e.g. employment, pension, rental income etc          15,000          15,000          15,000            45,000                  15,000
Total Income          65,000          65,000            5,000          135,000                  45,000
Trade profit more than 50% of total income? Yes Yes No Yes

Even if you made a loss in 2018/19, you would still qualify for the grant as your average trading profits for the 3 years are:-

  • £30,000 - which is less than £50,000
  • More than 50% of your TOTAL income, which is £45,000

Brought forward losses from an earlier year are not included in the calculation of profits for the puropses of the grant.

  • What about Capital Allowances?

Capital expenditure, on which capital allowances have been claimed in the year will reduce your taxable profits for the purposes of calculating the amount that you will receive under the grant.

  • Can I amend my return to disclaim Capital Allowances and claim the grant?

No, if an amended return is submitted after 26th March 2020, any changes will be ignored when looking at eligability and working out the amount of the grant.

  • What if I had more than one business in 2018/19?

If you had two separate businesses that traded in 2018/19, one made a profit of £80,000 and the other made a loss of £40,000, the two will be added together to give a profit of £40,000 for the year and you will qualify for the grant.

  • Can I continue to work and claim the grant?

Yes you can continue to work or take on other employment or voluntary work and still claim the grant.  HMRC will ask you to confirm that you traded in 2019/20 are trading when you apply, or would be except for coronavirus and intending to continue to trade in 2020/21.

  • Can I claim Universal Credit and still get the grant?

Yes you can make a claim for Universal Credit while you wait for the grant.  Any grant that you receive will be treated as part of your self-emplyed income and may affect the amount of Universal Credit that you get in the month in which it is paid.  Any Universal Credit for earlier months will not be affected.

If you have more questions regarding the SEISS then please do get in touch.