On the 29th May, the Chancellor announced that the Self Employed Income Support Scheme would be extended with those who are eligible being able to claim a second payment in August. The second payment will be based on your previous 3 years trading as before, but this time will be for 70% of your average profits and will be a one off payment covering 3 months, capped at a total of £6,570.
But are you adversely affected?
The criteria is a little different though for the second payment. You will only be eligible for the second payment if your business is ‘adversely affected’ on or after the 14th July 2020. The following guidance is taken directly from HMRC:
“Your business could be adversely affected by coronavirus if, for example:
- you’re unable to work because you:
- are shielding
- are self-isolating
- are on sick leave because of coronavirus
- have caring responsibilities because of coronavirus
- you’ve had to scale down 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”
The picture below is taken from HMRC’s guidance (can be viewed here) as to how adversely affected may be interpreted:
When can you claim?
At the moment all that has been announced is that applications to apply will open in August with payments being made towards the end of August. If you haven’t claimed the first grant yet, applications must be made by 13th July 2020. The key thing here is the dates. The government expects many businesses to start to return to normal over the coming weeks meaning many will not be entitled to the second wave of grants.
The grant is taxable
The SEISS has been a great scheme to help the self employed through this difficult time. But please don’t forget it is classed as additional income for your 2020-21 accounting period so will need to be included in your tax return and tax will be due on these payments by 31st January 2022.
If you would like to discuss the SEISS scheme further or to discuss the tax implications it will have on your business then please get in touch