COVID-19: Self-employed to get second SEISS grant
Jun 17, 2020
PAGE UPDATED: 17/06/20
Chancellor Rishi Sunak has said self-employed workers across the UK will be able to access a second and final SEISS grant from the government to cover lost income while the country is in lockdown.
This second grant paid out by the Self-Employment Income Support Scheme (SEISS) will be worth 70% of earnings and it will be capped at £6,570.
The Government offered the first grant to the self-employed in March, to help those affected by the impact of coronavirus on the economy. The scheme has been used by 2.6 million so far, and has paid out an average award of £2,900, totalling £6.8bn in claims.
What period is covered by the second grant?
The initial grant ran for three months, to cover profits lost during March to May. It paid businesses 80% of their average monthly trading profits over the previous three tax years, and was capped at £7,500.
This second and final round will cover June, July and August. The same eligibility criteria will be used to establish an individual’s entitlement to the grant. It will be calculated at 70% of a self-employed person’s average monthly trading profits, to cover three months’ worth of income up to a limit of £6,570, so a reduction on the maximum initial grant.
When can I claim for the second grant?
The SEISS portal will close for claims for the initial grant period on 13 July. If you haven’t already claimed for the first grant, you must do so by this date. Applications for the next grant period will open in August.
You do not need to have claimed the first grant to be eligible for the second and final grant. However your business must have been adversely affected by coronavirus, either on or before 13 July to claim the first grant, or on or after 14 July to claim the second grant.
How your business might be adversely affected
HMRC’s guidance gives the following examples of how your business might be adversely affected:
You might be unable to work because you:
- are shielding or self-isolating
- are on sick leave because of coronavirus
- have caring responsibilities because of coronavirus
You may also have had to scale down your business or temporarily stop trading because:
- your supply chain has been interrupted
- you have fewer or no customers or clients
- your staff are unable to come in to work
Other examples include the additional costs that you might have to bear in order to enable the business to comply with physical distancing requirements.
How your circumstances can affect your claim
HMRC has published a list of different circumstances which may affect your eligibility to claim the Self-Employed Income Support Scheme. These include:
- A late or amended tax return, or one which is under enquiry
- Being a member of a partnership
- Being on or taking parental leave
- Having loans covered by the loan charge which weren’t settled with HMRC by 20/12/19
- Claiming averaging relief
- State aid
- Being non-resident or choosing the remittance basis
The SEISS and VAT
The SEISS grant is classed as a taxable business income, however it is outside the scope of VAT. So if you use the VAT flat rate scheme, you will have no VAT to pay on the grant income. Your SEISS grant should not be included on your VAT return as turnover, and you should not include it in your calculations to determine if your business has exceeded the VAT registration threshold of £85,000.
Unfortunately the Government has not extended the scheme to those who were not eligible for the first grant payment. As such, a large number of self-employed people such as those who make profits of over £50,000 per year, or those who started self-employment after April 2019, are still missing out on the government’s self-employment support package.
If you have any questions about the SEISS and whether you can make a claim please contact us and we’ll gladly advise you.