As part of the Winter Economy Plan, it was announced that the Self-Employment Income Support Scheme (SEISS) will be extended beyond the second taxable grant.
The extended SEISS will run for a period of six months, from November 2020 through to April 2021.
This new phase of the scheme will differ from the first two SEISS grants, specifically in its updated eligibility criteria that now includes the requirements that an individual must be actively continuing to trade, whilst still facing reduced demand due to coronavirus.
Will I be eligible for the extended SEISS?
To be eligible for the extended grant, self-employed individuals, including members of a partnership must:
- Currently be eligible for the Self-Employment Income Support Scheme (although they do not need to have claimed the previous grants);
- Declare that they are currently actively trading and intend to continue to trade; and
- Declare that they are impacted due to reduced demand due to coronavirus in the qualifying period (between 1 November and the date of the claim).
The requirements to be ‘actively trading’ and ‘impacted due to reduced demand’ are new to the scheme. Further guidance is due to be published, providing more clarity on the revised criteria and what this means for those claiming through the scheme.
Based on the specific reference to ‘actively trading’, it is implicit that if a business closed as a result of the pandemic and has not traded since, then they will be unable to claim through the extended scheme.
The change from ‘adversely affected’ in the first two grants, to ‘impacted due to reduced demand’ in the extended scheme, indicates that a more explicit requirement will shortly be outlined by HMRC.
What does the extended SEISS cover?
The extended SEISS will consist of two grants, paid in two lump sum instalments, each covering a three-month period. Each grant will be subject to Income Tax and National Insurance Contributions.
The first grant
- Covers a three-month period from the 1 November until the 31 January 2021; and
- Will be a taxable grant, covering 20% of average trading profits; and
- Covers three months’ worth of profits, capped at £1,875 in total.
The second grant
- Covers a three-month period from 1 February 2021 until the 30 April 2020; and
- HMRC will review the level of the second grant in due course.
How do I apply?
HMRC have yet to publish details about claiming and how to make an application. Additional guidance on this extended scheme will be circulated as soon as it is made available.
Should you have any queries on the above or require any help or support, then please either get in touch with your usual M+A Partners contact or email firstname.lastname@example.org and we will be happy to help.