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Updated Self-Employment Income Support Scheme Grant Extension

Updated 24th November 2020

The Self-Employment Income Support Scheme Grant Extension provides financial support to the self-employed in the form of two grants, each available for three month periods covering 1 November 2020 to 31 January 2021 and 1 February 2021 to 30 April 2021.

To make a claim for the third grant a business must have had a new or continuing impact from coronavirus between 1 November 2020 and 29 January 2021.

The third taxable grant is worth 80% of an individual’s average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, capped at £7,500 in total.

Applications for the third grant will open from 30 November 2020. Individuals can make claims from the date HMRC advise them to do so (by email, letter or within the online service itself). If eligible, claims for the third grant must be made on or before 29 January 2021.

The third grant will be subject to income tax and self-employed national insurance contributions. The SEISS grants must be reported on the 2020/21 self assessment tax returns.

HMRC expects individuals to make an honest assessment about whether they reasonably believe that their business will have a significant reduction in profits due to coronavirus.

Evidence to support claims must be maintained, such as a record of cancelled contracts or appointments, fewer invoices, dates where there was reduced trading activity or capacity due to government restrictions etc.

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 grants (although a claim does not need to have been made for the previous grants)
  • be currently trading but are faced with reduced demand due to coronavirus or have been trading but are temporarily unable to do so due to coronavirus
  • declare that there is an intention to continue to trade and there is reasonable belief that there will be a significant reduction in trading profits

Reasonable belief

In order to claim, an individual must reasonably believe that they will suffer a significant reduction in trading profits due to reduced business activity, capacity or demand or inability to trade due to coronavirus during the period 1 November to 29 January 2021. A record must be kept to support how the business has been impacted by coronavirus resulting in less business activity than otherwise expected.

Significant reduction

Before a claim is made, an individual must decide if the impact on the business will cause a significant reduction in trading profits.

An individual should wait until there is a reasonable belief that trading profits are going to be significantly reduced, before filing a claim.

HMRC provides examples here to help individuals assess whether a claim can be made.

How to claim

The online service for the third grant will be available from 30 November 2020.  

Claims for the third grant must be made on or before 29 January 2021.

Further information is available here

About the author

Simon is the Tax Director at Ward Williams and has more than 20 years of practical experience working in the tax profession.

 

Specialising in personal tax, Simon qualified as a Tax Technician in 2007, having been awarded with the Ivison medal for attaining the highest mark in the Personal Taxation paper in 2006.

 

As department head, Simon oversees the tax team across the Ward Williams group, whilst managing a diverse portfolio of clients including high net worth individuals, doctors, directors of owner managed businesses, partnerships and sole traders.

simon.boxall@wardwilliams.co.uk

01895 236335