Self-employed Income Support Scheme (SEISS)
Two further grants under the SEISS that were announced in September have now been updated. The original SEISS offered two support grants to the self-employed, with applications closing in July and again in October. The new extension covers a six-month period divided into two additional grants.
The level of the third grant has been increased twice since its initial announcement from the original 40%, to 55% and now 80% of average monthly profits. Applications for the third grant covering the three months from November 2020 to January 2021 will open on 30 November and will be capped at a maximum of £7,500, paid in a single instalment. HMRC says that it will pay the grant “sooner than planned and in good time for Christmas”.
The fourth grant will cover the three months from February to April 2021, however no further details have been released as yet.
To be eligible for the third grant you must have been eligible for the previous two (even if they were not actually claimed), so this excludes anyone with:
- average annual profits exceeding £50,000;
- self-employed income that makes up less than 50% of total income; or
- no trading history before the 2019/20 tax year.
In addition, you will have to declare that you intend to continue trading and are either currently actively trading, but are impacted by reduced demand due to Covid-19, or were previously trading but are now temporarily unable to do so due to Covid-19. HMRC has reworded some requirements on the rules. around active trading and the impact of reduced demand which could indicate some tightening up of approach.
The first two grants were based on average profits for the tax years 2016/17, 2017/18 and 2018/19. At this point, there is no indication if HMRC will allow profits for 2019/20 to be taken into consideration.
The Chancellor appears to have heeded the widespread criticism levelled at the reduction in support for the self-employed he originally outlined. The uplift to 80% now matches the extension of the furlough scheme, at least until the end of January.