Following the Chancellor’s announcement on the 5th November about the increased 3rd grant for SEISS the full details of the grant criteria have now been published by HMRC.
The third grant, which offers 80% of three months’ average trading profits, paid out in a single taxable instalment capped at £7,500, will be available covering the period from 1 November 2020 to 29 January 2021. Self-employed people who are eligible and in need of support will be able to claim the third grant at any time from 30 November 2020 to 29 January 2021. As per the previous grants they will be subject to Income Tax and self-employed National Insurance, and must be reported on the 2020-21 Self-Assessment tax returns.
HMRC’s guidance on eligibility criteria is as follows:
“As before, to make a claim for the third grant, each claimant must:
• be a self-employed individual or a member of a partnership. They cannot claim the grant if they trade through a limited company or a trust
• have traded in both the tax years 2018 to 2019 and 2019 to 2020.
For the third SEISS grant claimants must also:
• either be currently trading but are impacted by reduced activity, capacity or demand, or have been previously trading but are temporarily unable to do so due to coronavirus
• 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 their trading profits
• only claim if the reduction in profits is caused by reduced business activity, capacity or demand, or inability to trade due to coronavirus – reduction in profits due to increased costs (such as having to buy masks) does not count for this purpose.
When deciding whether the reduction is significant, claimants will need to consider their wider business circumstances.
We expect claimants to make an honest assessment about whether they reasonably believe their trading profits will be significantly reduced compared to what they would otherwise expect to achieve during this period.
The business must have been impacted on or after 1 November 2020. Your clients must keep evidence to show the impact and reduction in their business activity across the qualifying period.”
There will also be a 4th grant (covering the three-month period from February 2021 to April 2021). HMRC will confirm the details for that grant nearer the time, including how much it will be and the rules for claiming.
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