If you are applying for the fifth and final grant of the Self-Employment Income Support…
The third round of the Self-Employment Income Support Scheme (SEISS) will open on Monday 30 November 2020 with tighter eligibility criteria than have applied to the previous two rounds of the scheme.
The third grant is worth 80 per cent of a self-employed individual’s usual trading profits over three months, capped at £7,500 in total and paid in a single instalment.
As with the previous rounds, the third round of the scheme is open both to self-employed individuals who can continue trading and those who cannot.
Applicants must have traded in 2018-19 and submitted a Self-Assessment tax return by 23 April 2020, have traded in 2019-20 and intend to continue to trade in future.
However, unlike previous rounds, the third round of the scheme is only open to those who “reasonably believe” they will have a “significant” reduction in profits caused by reduced demand or being unable to trade as a consequence of Coronavirus between 1 November 2020 and 29 January 2021. Previous rounds of the scheme only required individuals to self-certify that they had been “adversely affected” by the pandemic.
The new requirements mean self-employed individuals affected by increased costs as a consequence of Coronavirus will only be eligible for the third round of the SEISS if they have also experienced a reduction in trade or have been unable to trade. This condition applies even if they were eligible for previous rounds.
HM Revenue & Customs (HMRC) has not provided a precise definition of what constitutes a “significant” reduction in trading profits, saying that self-employed individuals will need to consider their individual and wider circumstances in deciding this.
Likewise, HMRC provides little elaboration as to what constitutes a “reasonable belief”. However, it does say that applicants must keep evidence showing how their trading has been impacted by Coronavirus.
Guidance from HM Revenue & Customs (HMRC) provides examples of circumstances in which an individual could be affected by reduced demand:
- Have fewer customers or clients than you’d normally expect, resulting in reduced activity due to social distancing or government restrictions;
- Have one or more contracts that have been cancelled and not replaced;
- Carried out less work due to supply chain disruptions.
The HMRC guidance also gives examples of circumstances in which an individual could consider themselves to have been previously trading but temporarily unable to do so:
- your business has had to close due to Government restrictions;
- you’ve been instructed to shield or self-isolate in-line with NHS guidelines and are unable to work from home (if you’ve been abroad and have to self-isolate, this does not count);
- you’ve tested positive for Coronavirus and are unable to work;
- you cannot work due to parental caring responsibilities, for example as a result of school or childcare facility closures.
The guidance goes on to give a range of hypothetical examples of these circumstances, which suggest that self-employed individuals will only be eligible if they reasonably expect a reduction in profits resulting from Coronavirus causing a reduction in trade or preventing them from trading.
Applications for the scheme will be open from 30 November 2020 and will close on 29 January 2021 through HMRC’s online portal.