What You Need To Know About The Extension to SEISS
During Chancellor Rishi Sunak’s budget speech on 3rd March 2021, he announced an extension to the grants available under the Self-Employed Income Support Scheme (SEISS), which was set up to protect the livelihoods of self-employed people in the UK through the remaining phase of this crisis. An estimated additional 600,000 people could benefit from these grants, the first of which comes into force at the end of this month, April 2021. In this post, our Accounting Team shares whether you might be eligible and what this extension could mean for you.
The SEISS was created in response to the effects of the pandemic on businesses, aiming to provide some support where the business has been unable to trade or has suffered from reduced activity, capacity or demand. Some examples of situations this might include can be found on the Government website here.
The first three grants have helped a huge number of people at a very difficult time, so we recommend claiming if you are eligible to do so. It's important to remember that you can only claim the grant if you have been adversely affected by the pandemic and that grants received under the scheme are taxable and must be considered in working out your profits. What you may be able to claim under the scheme will depend on when you commenced self-employment. You can check if you're eligible to claim on the gov.uk website here.
If you commenced self-employment after 5th April 2019
If you started your self-employment after 5th April 2019, you were denied support under this scheme from the first three quarterly payouts to 31 January 2021. However, the good news is that due to lobbying by tax professionals and self-employed support groups, the SEISS is now being opened to traders who began after 5th April 2019. Your tax return for 2019-20 needs to have been filed by midnight on 2nd March 2021 to qualify. If your tax return was filed after this date you can call us for advice on what to do.
To claim the grants your business must show that it has been adversely affected by the pandemic and your profits from self-employment must be at least 50% of your income and less than £50,000. It's worth noting that there may be further hoops to jump through, as HMRC are writing to up to 100,000 self-employed individuals asking them to confirm their identity and show proof that they were trading before they can access the fourth SEISS grant.
If you commenced self-employment on or before 5th April 2019
If you began your self-employment on or before 5th April 2019 then hopefully you should already be aware of the scheme and have applied for the first three grants. If you haven't you can get in touch with our Team for advice on what to do. For those individuals that qualified for the first three grants, you should qualify for the fourth and fifth grants unless your circumstances have changed, for example, if you are no longer adversely affected by COVID disruption or you have stopped trading to name a few.
If you are unsure if you have been adversely affected by COVID and can claim the grant then we can help you understand your situation. Get in touch with us to talk things through.
For those of you who may be claiming for the first time, you will need to claim using your online tax account. HMRC should advise you when the claims process is open for business.
How to apply for the fourth grant – 1st February 2021 to 30th April 2021
The fourth grant under the scheme covers February to April 2021. It is worth 80% of three months’ average profits capped at £7,500 and can be claimed from late April via the Government's online service.
How to apply for the fifth and final grant – 1st May 2021 to 30th September 2021
The fifth and final grant covers the period from May to September 2021. The amount of the grant will depend on the impact that Covid-19 disruption has had on your profits.
If your turnover has fallen by 30% or more because of Covid-19, you will be able to claim a grant equal to 80% of your average profits for three months, capped at £7,500. However, if your turnover has dropped by less than 30%, you will be entitled to a reduced grant of 30% of three months’ average profits, capped at £2,850.
The final grant can be claimed from late July.
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