The Chancellor confirmed more generous terms for the remaining SEISS grants (Self-employment Income Support Scheme grants). The third SEISS grant will now be based on 80% of average trading profits and businesses temporarily unable to trade due to coronavirus will be eligible.
The SEISS Grant Extension provides much needed support to the self-employed in the form of two grants. The first grant is for the three month periods covering November 2020 to January 2021. The second grant covers February 2021 to April 2021.
What has changed?
- The level of the third grant will be based on 80% of average trading profits for November, December and January instead of 40% that Sunak previously announced.
- The grant will be paid out in a single instalment covering 3 months’ worth of profits and is capped at £7,500.
- The level of the fourth grant is to be kept under review and announced in due course.
- Businesses temporarily unable to trade due to coronavirus were to be excluded from claiming the third and fourth grants but will now be eligible.
It remains the case that claimants must have been previously eligible for the first and second grant, (although they do not have to have claimed the previous grants) and must declare that they intend to continue to trade and either:
- are currently actively trading but are impacted by reduced demand due to coronavirus, or
- were previously trading but are temporarily unable to do so due to coronavirus.
Unfortunately, SEISS grants have not been extended to businesses that were not eligible for the grants earlier this year, and information from 2019/20 returns will not be taken into account.
Claims for the second SEISS grant have now closed and HMRC has temporarily withdrawn guidance on the scheme while it develops guidance on the third and fourth grants. More details to follow from HMRC shortly.
How to claim?
The online service for the next grant will be available from 30 November 2020. Information will be available at that time.
A word of caution though…
HMRC has started writing to Self-employment Income Support Scheme (SEISS) grant claimants that may have ceased trading and therefore do not qualify.
Recipients of the email are asked to complete a form that has been developed specifically to gather responses to these emails.
The form must be completed either to confirm that the taxpayer has ceased trading and needs to repay the grant or to confirm that HMRC’s information is incorrect and the taxpayer did not cease trading or has restarted.
HMRC is allowing extra time to complete the form. The deadline to avoid a possible penalty is 20 November 2020. Agents cannot submit the form on behalf of clients.
Any questions about SEISS grants or any other support you may need, please get in touch.