Rishi Sunak announced on Friday that the Self-Employment Income Support Scheme will be extended – with those eligible able to claim a SEISS Second Payout capped at £6,570. This will be the final grant available for the self employed.
Those eligible under the Self-Employment Income Support Scheme (SEISS), which has so far seen 2.3 million claims worth £6.8 billion will be able to claim a second and final grant in August.
To maintain fairness alongside the job retention scheme the value of the final grant will be worth 70% of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total.
This tapering of support is designed to encourage people back to work before the cliff edge as the Chancellor has stated that “There will be no changes and no further extensions to the scheme, which continues to be one of the most generous in the world”.
The Chancellor recognises that some, including the newly self employed, are not eligible for these grants and on many occasions has stated that he can’t save every job, every business and every charity, pointing to other support such as the £95 per week Universal Benefit (not enough for most people to live on).
The reality for self employed people is that it’s time to get back to work, although for some their businesses still can’t operate, especially those for instance in the hospitality and leisure sectors.
SEISS Second Payout timeline
13th July claim deadline for SEISS First Payout
Individuals can continue to apply for the first SEISS grant until 13 July. Under the first grant, eligible individuals can claim a taxable grant worth 80% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £7,500 in total. Those eligible have the money paid into their bank account within six working days of completing a claim.
Applications for SEISS Second Payout
Applications for the second grant will open in August. Individuals will be able to claim a second taxable grant worth 70% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total.
SEISS Second Payout eligibility criteria
The eligibility criteria are the same for both grants, and individuals will need to confirm that their business has been adversely affected by coronavirus.
An individual does not need to have claimed the first grant to receive the second grant: for example, they may only have been adversely affected by COVID-19 in this later phase. Further guidance on the second grant will be published on Friday 12 June. Equally, just because you claimed the first grant, you don’t have to apply for the second grant if your business is no longer adversely affected.
What is ‘adversely affected’
It is very important to note that if you claim SEISS you will need to keep evidence that your business has been adversely affected by Coronavirus and confirm your income suffered as a result of the Coronavirus. This doesn’t mean merely that you had some business challenges which frankly every business experiences in more normal times. It means on balance, any challenges you faced, balanced with any increase to profits your business saw, overall had a negative impact on your income. Remember you may be asked to justify your claim at a later date.
The Government are well aware that this scheme is open to fraudulent claims and will be carrying out investigations where they think fraud has taken place. They will expect you to keep records and provide on request evidence of the following to support your claim:
Business accounts showing a reduction in turnover
- Confirmation of any Coronavirus-related business loans you have received
- Dates your business had to close due to lockdown restrictions
- Dates you or your staff were unable to work due to Coronavirus symptoms, shielding or caring responsibilities due to school closures
Reasons your business saw a reduction in turnover to justify claiming SEISS could include
- When you were unable to work because you:
- were shielding
- were self-isolating
- were on sick leave because of coronavirus
- had caring responsibilities because of coronavirus
- When you 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
Bear in mind that you may not have to provide this evidence until after you tax return is submitted in January 2021. The SEISS provides grants not loans, but that won’t stop HMRC pursuing anyone who they believe has claimed fraudulently.