As part of the Government’s plan to extend the Self-Employment Income Support Scheme (SEISS) for a further six months, HM Revenue & Customs (HMRC) has announced new conditions that must be met.
The scope of the extended scheme will now be much narrower, with the third and fourth grants being less generous for the self-employed.
For example, the third grant will provide a taxable grant covering 20 per cent of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits – capped at £1,875 in total.
Since being announced in the Chancellor’s Winter Economy Plan, further details have now emerged about the SEISS grant extension in an HMRC factsheet.
These explain that to qualify for the additional grants in the coming months, applicants must meet these additional criteria:
These measures will seek to amend or work alongside the existing SEISS eligibility requirements, which state that a taxpayer will be eligible where they:
An applicant’s trading profits must still also be no more than £50,000 and more than half of their total income for either:
The main additions to the new qualifying criteria are that the taxpayer is “actively trading” and has been “impacted by reduced demand”.
The requirement to be actively trading will most likely mean that businesses that have had to close during the pandemic will not be able to claim if they have not restarted during the qualifying period.
HMRC has confirmed that the qualifying period for the third grant runs from 1 November to the date of a claim and the qualifying period for the fourth grant is also expected to run from 1 February 2021 to the date of that claim.
HMRC is expected to publish further guidance to clarify the meaning of the new terms included within the eligibility criteria soon. We will aim to keep you updated when this information is released.
Link: Self-Employment Income Support Scheme (SEISS) Grant Extension Factsheet
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