With the imposition of the second nationwide lockdown, the Chancellor has been forced to return to Parliament and announce extended job support measures. Two further grants under the SEISS were announced in September and have now been updated.
The government’s new package of support measures laid out in the Chancellor’s Winter Economy Plan have been either put on hold or reworked. Alongside an extended furlough scheme, now running at 80% of employee wages until the end of March 2021, the self-employed income support scheme (SEISS) also saw a substantive increase as the lockdown came into force.
The original SEISS offered two support grants to the self-employed, with applications closing in July and again in October. The new extension covers a six-month period divided into two additional grants. The level of the upcoming third grant has now been increased from the original 40% to 80% of average monthly profits – even higher than the 55% set out at the end of October. Applications for the third grant covering the three months from November 2020 to January 2021 will open on 30 November and will be capped at a maximum of £7,500, paid in a single instalment.
The fourth grant will cover the three months from February to April 2021, however no further details have been released as yet.
To be eligible for the third SEISS grant you must have been eligible for the previous two (even if they were not actually claimed), so this excludes anyone with:
· average annual profits exceeding £50,000; or
· self-employed income that makes up less than 50% of total income.
In addition, you will have to declare that you intend to continue trading and are either currently actively trading, but are impacted by reduced demand due to Covid-19, or were previously trading but are now temporarily unable to do so due to Covid-19. The requirements to be actively trading and to be impacted by reduced demand are new and might indicate that HMRC is tightening up the rules.
The first two grants were based on average profits for the tax years 2016/17, 2017/18 and 2018/19. At this point, there is no indication if HMRC will allow profits for 2019/20 to be taken into consideration.
The Chancellor appears to have heeded the widespread criticism levelled at the drop in support for the self-employed he originally outlined. The uplift to 80% now matches the extension of the furlough scheme, at least for the time being,
Ancojada Limited trading as Prosperitas Consult is not authorised or regulated to provide financial advice.
All financial advice is provided by other regulated businesses.