Applications now open for the third SEISS grant

30 November 2020

The claims portal for self-employed individual people, who are eligible for the third Self-Employment Income Support Scheme (SEISS) is now open on GOV.UK.

There are different rules surrounding who will be eligible for the claim when compared to the eligibility criteria for the previous SEISS grants. The one thing that remains consistent is that a Self-Assessment tax return for tax year 2018-19 must have been submitted, which displayed self-employment income.

The amount of the third grant will be calculated based on 80% of three months’ average trading profits, and it will be paid out in one single instalment and capped at a maximum of £7,500. This will cover the period from 1 November 2020 to 29 January 2021. The claims portal opened on 30 November 2020 and will close on 29 January 2021.

In line with the previous SEISS grants, the third amount will be subject to Income Tax and self-employed National Insurance, and those who receive it must record it on their Self-Assessment tax return for 2020-21, which is due by 31 January 2022.

Prior to submitting a claim, individuals should ensure that they are eligible for the grant.

As with the first two SEISS grants, tax agents aren’t able to claim the grant on behalf of their clients, and should refrain from attempting to do so, as it will trigger a fraud alert, which will subsequently delay payment of the grant.

To be eligible, claimants must, as previously:

  • Be either self-employed or a member of a partnership – claims for the grant can not be made where an individual trades through a limited company or a trust
  • Have traded in both tax years 2018-19 and 2019-20

Additionally, claimants must:

  • Either be currently trading, but seeing reduced business activity, capacity or demand due to coronavirus, or have been trading previously but are now temporarily unable to because of coronavirus
  • Declare that they intend to continue to trade, or resume trading, and that they reasonably believe that the impact of coronavirus on their business will result in a substantial reduction in their trading profits
  • Only claim where the reduced profits are a result of decreased business activity, capacity or demand, or due to an inability to trade due to coronavirus. A reduction in profits due to increased business costs, such as the need to buy masks, is not a valid reason for eligibility for the third SEISS grant

Potential claimants are reminded that, upon deciding where or not the reduction is significant, consideration needs to be given to wider business circumstances. They are also expected to make an honest assessment regarding whether they believe their trading profits will be reduced significantly, when compared to what they would have ordinarily expected to achieve over this period.

Businesses must have been affected either on or after 1 November 2020, and there is a record-keeping requirement in terms of retaining evidence to demonstrate how they have been impacted by coronavirus, which has resulted in decreased activity, capacity or demand, or where there is a temporary inability to trade.

HMRC has provided further information and examples to help potential claimants to check their eligibility and is contacting all self-employed individuals in the UK that may be eligible to inform them of the third grant.

Additionally, HMRC is hosting live webinars that provide further details around the extension to the SEISS.

A fourth grant will also be offered, to cover the period from February 2021 to April 2021, and further details about this will be published in due course.

 


The information in this article is accurate at the time of publication. For all the latest information, news and resources on how the COVID-19 pandemic is affecting payroll professions, visit our Coronavirus hub.