November 27th, 2020
COVID-19: Third Self-Employment Income Support Scheme Grant
The portal for the third tranche of the Self-Employment Income Support Scheme (SEISS) claims is due to open Monday 30 November 2020.
The rules on who is eligible to make a claim have changed. HMRC have stated that in order for self-employed businesses to be able to claim the third grant, a number of conditions need to be met, and an honest assessment will need to be made as to whether businesses reasonably believe their trading profits will reduce as a result of COVID.
Eligibility criteria
As with the first two grants, the applicant must:
- Be a self-employed individual or a member of a partnership. Those trading through limited companies or trusts are not eligible
- Have traded in both tax years 2018-19 and 2019-20
For the third grant, the applicant needs to not only be adversely affected due to COVID, but must also:
- Either be currently trading but impacted by reduced activity, capacity or demand, or have been previously trading but is temporarily unable to do so due to COVID
- Declare that they intend to continue to trade, and that they reasonably believe that the impact on their business will cause a significant reduction in trading profits
- Only claim if the reduction in profits is caused by reduced business activity, capacity or demand, or inability to trade due to COVID. A reduction in profits due to increased costs (e.g. having to buy masks) does not count for this purpose
Applicants will need to consider their wider business circumstances when deciding whether the reduction is significant. New guidance on how trading conditions affect eligibility can be found here.
To make a claim for the third grant the business must have had a new or continuing impact from COVID between 1 November 2020 and 29 January 2021.
The grant does not need to be repaid if the applicant is eligible, but, as with the previous grants, it will be subject to income tax and National Insurance, and will need to be declared on the 2020-21 tax return.
Evidence must be retained to support claims made.
What eligible applicants will get
The third grant offers 80% of three months’ average trading profits, paid out in a single instalment and capped at £7,500. This will cover period 1 November 2020 to 29 January 2021.
Making a claim
The portal will be open for those who are eligible and in need of support between 30 November 2020 and 29 January 2021.
HMRC will be contacting all self-employed people in the UK that may be eligible to inform them of the third grant.
You can check here if you are able to make a claim.
As with the first two claims, those who are eligible and need to make a claim must do this themselves – accountants and agents are not permitted to make claims on behalf of their clients, as this may trigger a fraud alert that will delay payment.
If applicants were not eligible for the first and second grants based on the information in their tax returns, they will not be eligible for the third grant. However, they don’t need to have applied for an earlier grant to apply for the third grant – as long as the applicant meets the eligibility criteria, a claim can be made.
Applicants still need to have submitted a self-assessment tax return for 2018-19 showing self-employment income by 23 April 2020 in order to make a claim (unless one of the existing exceptions applies).
Applicants can keep working if they make a claim, although they would need to declare that their business has been impacted for the period they are claiming for. HMRC will check for fraudulent claims.
There are plans for a fourth grant, covering period February 2021 to April 2021. More information about this will be published nearer the time.
