SEISS - Final grant

The Self-Employment Income Support Scheme has now reached the stage of the fifth, and final, grant. Whilst the eligibility criteria remains the same as for previous grants there are now two levels of grant depending on a turnover test. Where turnover has fallen by 30% or more a grant of 80% of three months average trading profits up to a cap of £7,500 is payable. Where turnover has fallen by less than 30% the grant is restricted to 30% of average profits capped at £2,850.

For all businesses, other than those who started trading in 2019/20, it is necessary to compare the turnover for the pandemic period with the reference period. The pandemic period is the period of twelve months from April 2020. The reference period is usually the turnover for the tax year 2019/20. In exceptional cases it may be possible to use the 2018/19 figures where the 2019/20 figures are not representative.

For those who started trading in 2019/20 no turnover test is necessary and 80% of average profits for three months (capped at £7,500) will be paid. Be aware that the start date is not taken into account so the average may be rather lower than expected.

Self-employment Income Support Scheme

During April you should be contacted by HMRC to let you know that you are eligible for the fourth instalment of the SEISS grant covering the period from 1 February to 30 April 2021. Eligibility criteria for this is different from the first three tranches but the amount due is similar.

To be eligible you must be self-employed or a member of a partnership and have traded in both 2019/20 and 2020/21. Your 2019/20 tax return must have been submitted by 2 March 2021. You may currently be trading but your demand has been reduced due to coronavirus or you may be temporarily closed due to coronavirus. You must declare that you intend to continue trading and your trading profits will be significantly reduced.

To be eligible for the grant your trading profits must be less than £50,000 and at least equal to your non-trading income. HMRC will look at the figures on the latest return but will also consider previous years if necessary to assess eligibility.

The grant will be calculated at 80% of 3 months' average trading profits, capped at £7,500 in total. HMRC will use up to 4 years of submitted tax returns to calculate average trading profits.

As with the previous grants you will need to make the claim yourself through the appropriate portal. Guidance is provided on the gov.uk website if you are in doubt. If you are not contacted by HMRC in the coming weeks but think you should be eligible please get in touch with our office.

The Budget - CJRS & SEISS

Coronavirus Job Retention Scheme

This scheme has been further extended until 30 September 2021. There will be no change to the amount payable to furloughed staff (80% up to a cap of £2,500 per month) but, from July, employers will be asked to make a contribution to the cost. This will amount to 10% in July and 20% in August and September.

Self-employment Income Support Scheme

It was announced in November that a fourth grant would be forthcoming under this scheme and this has now been confirmed. Eligibility for this grant (and the 5th instalment) will be based on the submission of the tax return for 2019/20 but otherwise on similar criteria to the previous tranches. The fourth grant will be 80% of average trading profits for 3 months up to a maximum of £7,500 - broadly in line with the payments under CJRS.

There will be a fifth grant, probably payable in July, covering the period from May to September. Not all the details are available but it appears that the maximum grant will be the same as before ie 80% of 3 months profits up to a maximum of £7,500. However this will only be payable to those businesses whose turnover has reduced by more than 30% between April 2020 and April 2021. If the reduction is less than 30% the payment will only be 30% of 3 months profits capped at £2,850. This seems, on the face of it, to be far less generous than the CJRS given that it only covers 3 months for a 5 month period and could be a much lower percentage.

SEISS

The portal for applications for the latest round of support under the Self Employment Income Support Scheme is now open. If you were eligible for the first and second grants you may be eligible for this one, even if you did not previously submit a claim. To claim you must have had a new or continuing impact from coronavirus between 1 November 2020 and 29 January 2021. You must believe that this impact will result in a significant reduction in your profits. The grant will be worth 80% of your average monthly trading profits for 3 months up to a maximum payment of £7,500 (£2,500 per month).

Remember that to be eligible your trading profits must be no more than £50,000 and at least equal to your non-trading income. You must make your claim on or before 29 January 2021. Please contact a member of our staff if you need assistance.

JRS & SEISS

I think the Chancellor thinks I am short of work! Just when I get to grips with the new rules for furloughing or the self-employment support he decides to change everything again. At least these changes are good news.

The furlough scheme has been extended to the end of March 2020. In the first 3 months of the scheme - November to January - the government will pay 80% of the furloughed employees' wages with the employer only paying the national insurance and pension contributions. For the self-employed the SEISS will pay 80% of average profits for the next 3 months up to a maximum of £7,500. Eligibility rules are as I set out in my most recent posts - at least those haven't changed. Yet!

SEISS

It now appears that the support for the self-employed through the SEISS is to be enhanced for the month of November at least. Originally the grant would have amounted to 40% of average profits for the 3 month period to end January. Now it will be 80% of profits for November and 40% for the remaining 2 months. It will also be paid earlier, probably around the start of December.

I am slightly concerned about the Treasury's sums. A spokesperson said that this revised support resulted in a grant of 55% for the 3 months - I actually make it between 53% and 54% but who's counting? The maximum grant will be just over £5,000.

SEISS - increased support

As with the Job Support Scheme, then Chancellor has improved the support for the self-employed through the extension to the Self-Employment Income Support Scheme. The extension will last for 6 months from November 2020 to April 2021 with grants paid out in 2 lump sums covering each 3 month period. In the first 3 months the Government will now pay a grant to eligible individuals amounting to 40% of average monthly trading profits capped at £3,750 in total. The level of the second grant will be set in due course.

In broad terms you will be eligible if you were eligible for the first tranches of grant (even if you did not claim) and your trading continues to be affected by the virus.

SEISS - Last chance

Please remember that the last date for any claims under the SEISS for the second tranche of grants is 19 October 2020. Time is running out.

Self-employment Income Support Scheme (SEISS)

An initial grant was made available to support self-employed individuals or partnerships, worth 80% of their profits up to a maximum of £2,500 per month. Like the JRS, the scheme was open initially for a period of 3 months. A further grant will now be open for claims in mid-August although it will be worth 70% of profits rather than 80% up to a maximum of £6,570 for the 3 months. Profits will be calculated by reference to your profits in the last 3 years of trading as declared on your tax returns. If you have been trading for less than 3 years then the shorter period will be used as long as you have at least submitted a tax return for 2018/19 showing your self-employed income.

 You will only be eligible if you have lost trading profits due to Covid-19 but you do not have to have stopped work completely. You will not be eligible if your average income exceeds £50,000 per annum or if self-employment is not your main source of income (ie >50%). Claims can be made from 17 August.

Click on the link below or paste the address into your browser, it will take you straight to the relevant page on the gov.uk website.

https://www.gov.uk/guidance/claim-a-grant-through-the-self-employment-income-support-scheme?utm_source=0c40359d-5a02-4692-86d6-3651cae8807d&utm_medium=email&utm_campaign=govuk-notifications&utm_content=daily#claim