The Self-Employment Income Support Scheme (SEISS) became a lifeline and comfort for many businesses that were negatively impacted by the COVID-19 pandemic. The past 12 months have been tough for everybody. This has been especially true for businesses that have been unable to open their doors, or for those left unable to work.
Following on from the Spring 2021 Budget, Rishi Sunak announced plans to extend furlough until the end of September. As a result, the Government will continue to provide support to the self-employed for this period too.
To date, there have been three grants made to eligible business and individuals across the UK. The extension provided 2 further grants, and a change to the eligibility criteria. Individuals who started trading in 2019/20 may now be eligible to claim.
The fourth grant includes the period from February to April 2021. The amount due is based on 80% of average trading profits. This amount is capped at £7,500, and will hit bank accounts in one payment.
The eligibility criteria is based on a few caveats:
- The trader must have filed his/her 2019/20 Self-Assessment Tax Return and traded in 2020/21
- Only those who had trading profits under £50,000 for 2019/20 are eligible. However if traders had exceeded £50,000 in 2019/20, they must average no more than £50,000 for the 2016/17 to 2019/20 tax years to benefit from this grant.
- Income from self-employment must account for at least 50% of the individual’s total income
To qualify for the grant, the trader must either:
- be trading currently but demand has fallen as a result of the impact of the Covid-19 pandemic; or
- have been trading but is unable to do so temporarily as a result of the Covid-19 pandemic.
The trader must also declare that:
- they intend to continue trading; and
- they reasonably believe that there will be a significant reduction in their trading profits due to reduced business activity, capacity, demand or inability to trade due to Coronavirus.
The claims for the fourth grant can be made online from late April 2021 until 31 May 2021. This can be made through the HMRC website on the below link.
The fifth (and hopefully final) grant will then cover the period of May to September 2021. This amount is calculated based on how much turnover has fallen due to the pandemic.
Where traders have experienced a reduction in turnover of at least 30%, they will be eligible for a grant. Like the fourth grant, this will be calculated based on 80% of average trading profits and capped at £7,500.
If you are a trader who has been impacted by the Covid-19 pandemic but have not seen a reduction of turnover of 30%, you may still be eligible for a smaller grant. The smaller grant would be capped at £2,850 and is calculated based on 30% of the three months average trading profits.
NEWLY SELF- EMPLOYED
During the start of the pandemic when the SEISS was originally introduced, only those who had filed their 2018/19 tax return by 23 April 2020 were eligible. As we are now 12 months on, the 2019/20 tax return deadline of 31 January 2021 has now passed, meaning individuals who had previously missed out can now claim.
Individuals who have been unfavourably impacted by the Covid-19 pandemic can claim the fourth and fifth grants under the scheme provided they had filed their 2019/20 self-assessment before midnight on 2 March 2021. They will also need to meet all eligibility criteria.
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