by David Watkinson Watkinson Black
Applications for the fourth Self Employed Income Support Scheme (SEISS) grant are now being accepted.
The SEISS is available to anyone who is self-employed or a member of a partnership and whose trading has been impacted by coronavirus. You cannot claim the grant if you trade through a limited company or trust. This fourth grant covers the period February to April 2021. If you are eligible then you only have until 1st June 2021 to apply.
Applications for the grant cannot be made by an agent but must be made by the affected taxpayer. If you wish to make a claim then you will need:
- Your self assessment Unique Taxpayers Reference (UTR) number
- Your National Insurance number
- Your Government Gateway User ID and password, and
- Your bank sort code and account number, together with the name and address linked to that account
One major difference between this grant and earlier ones is that it is open to people who became self employed in the tax year ending 5th April 2020. Earlier grants were only available to people who were self employed at 5th April 2019.
To be eligible to receive the grant you must be able to meet the following criteria:
- You must have traded in both 2019-20 and 2020-21 tax years
- You must have submitted your 2020 tax return by 2nd March 2021
- Your trading profits on that return must not exceed £50,000
- Your trading profits must equal or exceed your non-trading income, and
- You must
- either be currently trading but suffering reduced demand because of coronavirus
- or have been trading but are temporarily unable to do so due to coronavirus
Finally, you must declare that:
- You intend to continue to trade, and
- You reasonably believe that there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus. This is a second very important change to the qualifying criteria for this grant!
HMRC have stated that the decision as to whether you had a reasonable belief that profits would be reduced must be the taxpayers decision and not theirs. However, they have stated that they will be checking on whether the grant has been correctly claimed, and have produced guidance on what they would expect to be taken into consideration by the taxpayer in forming their belief. This is available at www.gov.uk/guidance/how-your-trading-conditions-affect-your-eligibility-for-the-self-employment-income-support-scheme#examples.
One example given is of a café which can only provide takeaways due to government restrictions. The fact that the café is unable to provide seated accommodation to customers might be the basis of a reasonable belief that profits will be reduced and thus enable the owner to claim the fourth grant. However, if the owner has increased prices to compensate for the reduced demand then there would then be no reasonable belief, and the owner would be unable to claim.
In deciding whether there has been a significant reduction in profits there is no need to take into account any other form of government assistance such as grants received under the Coronavirus Job Retention Scheme. Also, if a claim is made and then demand and profits subsequently recover then this would not disqualify the trader from the SEISS grant as he would have had a reasonable belief at the time of the claim.
If you are suffering reduced activity, in addition to the normal self-employment record keeping requirements you will need to keep any evidence of your reduced activity, capacity or demand. This evidence could be business accounts showing the reduction compared to prior years, details of cancelled contracts or appointments, and/or a record of the dates when you had reduced demand due to government restrictions.
Of you are temporarily unable to trade then you should keep records such as a record of the dates you had to close due to government restrictions, a copy of communications from NHS Test and Trace instructing you to self-isolate and are unable to work from home, and/or a copy of a positive coronavirus test result.
The grant is set at 80% of 3 months average trading profit, and is capped at £7,500 in total.
To make a claim you should go to www.gov.uk/guidance/claim-a-grant-through-the-self-employment-income-support-scheme and click on the “Start Now” button.
HM Revenue & Customs have produced a webinar which explains the aim of the scheme, who can apply, how much you may be entitled to, how to claim the fourth grant, and what happens after you’ve claimed. Details of this and other HMRC webinars can be found at www.gov.uk/guidance/help-and-support-if-your-business-is-affected-by-coronavirus-covid-19
Hopefully, we may be reaching the end of this long-running series of articles on the effects of Coronavirus and the help available to reduce its impact. We look forward to being able to concentrate in future on more mundane matters such as tax allowances and rates! Meanwhile, please stay safe and healthy.
WatkinsonBlack have considerable experience in all areas of taxation and business services, including providing a very cost-effective payroll bureau service. If you want to arrange a no-obligation initial meeting on any taxation or accounting matter then please contact us. Our office is now open during all normal office hours. Please note that these ideas are intended to inform rather than advise and you should always obtain professional advice before taking any action.