Self-employed people and those in a partnership can now make a claim for the third round of the Self-Employment Income Support Scheme support, offered by the government in response to the Covid pandemic.
But there is a difference between this round and the first two grants that were made available.
For grants one and two, the claimant had to declare their business had been ‘adversely affected’. For round three, however, the criteria have been changed. This time, claimants must declare they have had a significant reduction in trading profits in the current tax year, due to Coronavirus.
Before you make a claim, you must decide if the impact on your business will cause a significant reduction in your trading profits for the tax year you report them in.
HMRC cannot make this decision for you because your individual and wider business circumstances will need to be considered when deciding whether the reduction is significant.
You should wait until you have a reasonable belief that your trading profits are going to be significantly reduced, before you make your claim.
You must keep evidence that shows how your business has been impacted by coronavirus resulting in less business activity than otherwise expected.
The online service for the third SEISS grant opened this week, and the deadline for making a claim is 29 January 2021. This third grant covers the period of 1 November 2020 to 29 January 2021 and – as with the others – is taxable, so must be declared on a tax return.
Claimants will also have to have submitted a self-assessment tax return for the tax year 2018 to 2019 showing self-employment income.
To bring parity with the furlough support introduced for employed people, the SEISS is worth 80 per cent of the person’s average monthly trading profits, paid out in a single instalment, with a maximum payment of capped at £7,500.
If you are self-employed or in a partnership, and would like help or advice with SEISS or any other accounting or tax issues, please get in touch with the team at Optimum.
Optimum are accountants in Swindon, specialising in accountancy, personal and business tax, audit, bookkeeping and payroll.