The government’s new package of support has been re worked
Two further grants under the SEISS were announced in September and have now been updated.
Following the announcement of a second lockdown, the government’s new package of support measures announced in the Chancellor’s Winter Economy Plan have been reworked, including an increase to the self-employed income support scheme (SEISS).
The extension covers a six-month period divided into two additional grants. The level of the upcoming third grant has now been increased from its initial 40% to 55% of average monthly profits. Applications for the third grant covering the three months from November 2020 to January 2021 will open on 30 November and will be capped at a maximum of £5,160, paid in a single instalment.
The fourth grant will cover the three months from February to April 2021, however no further details have been released as yet.
To be eligible for the third grant you must have been eligible for the previous two (even if they were not actually claimed), so this excludes anyone with:
- average annual profits exceeding £50,000; or
- self-employed income that makes up less than 50% of total income.
In addition, you will have to declare that you intend to continue trading and are either currently actively trading, but are impacted by reduced demand due to Covid-19, or were previously trading but are now temporarily unable to do so due to Covid-19. The requirements to be actively trading and to be impacted by reduced demand are new and might indicate that HMRC is tightening up the rules.
The first two grants were based on average profits for the tax years 2016/17, 2017/18 and 2018/19. At this point, there is no indication if HMRC will allow profits for 2019/20 to be taken into consideration.
The Chancellor’s latest round of grants have faced widespread criticism offering less support than that available for employees who cannot work due to Covid-19, and, even with the increased level of 55%, the third grant is still less than 70% of the amount paid under the first grant.
If you have questions about the business support available please do get in touch