The UK Government recognises the continued impact that coronavirus (COVID-19) has had on the self-employed and has taken action to provide support.
The Self-Employment Income Support Scheme Grant Extension provides critical support to the self-employed in the form of two grants, each available for three month periods covering November 2020 to January 2021 and February 2021 to April 2021.
1. Who can claim
To be eligible for the Grant Extension self-employed individuals, including members of partnerships, must:
· have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
· declare that they intend to continue to trade and either:
· are currently actively trading but are impacted by reduced demand due to coronavirus
· were previously trading but are temporarily unable to do so due to coronavirus
2. What the Grant Extension covers
The extension will last for six months, from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a three-month period.
The first grant will cover a three-month period from 1 November 2020 until 31 January 2021. The Government will provide a taxable grant covering 55% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £5,160 in total.
The grant will be increased from the previously announced level of 40% of trading profits to 80% for November 2020. This therefore increases the total level of the grant from 40% to 55% of trading profits for 1 November 2020 to 31 January 2020.
The Government are providing broadly the same level of support for the self-employed as is being provided for employees through the Coronavirus Job Retention Scheme in November due to its extension. And then the Job Support scheme in December and January.
The second grant will cover a three-month period from 1 February 2021 until 30 April 2021. The Government will review the level of the second grant and set this in due course.
The grants are taxable income and also subject to National Insurance contributions.
3. How to claim
The online service for the next grant will be available from 30 November 2020. HMRC will provide full details about claiming and applications in guidance on GOV.UK in due course.
A Note of Caution
HMRC have already begun recouping SEISS that were incorrectly claimed in round 1 and 2 with penalties of up to 100% of the amount mis-claimed be able to be applied. Make no mistake, HMRC are viewing these mis-claims in the same manner as tax fraud or tax evasion unless mitigating circumstances can be put forward.
So please read the eligibility carefully and ensure that you are still eligible then make a clear note for your own records as to why you consider you were impacted by coronavirus which you can later rely on should the need arise.
These are uncertain times and things are moving fast so we would urge you to keep abreast of matters by following a trusted broadcaster such as the BBC and also using all the reputable information sources that are open to you such as the CBI, FSB, Chambers of Commerce and your relevant trade body.
As things continue to move so quickly, the important details of how, what and when are not readily available but as and when we have more details then we will be in touch again.
Until then, stay strong and stay safe and check out our blog for other useful resources. https://enterpriseaccountancy.co.uk/blog/