The window for claiming the third Self-Employment Income Support Scheme grant (SEISS grants) opened on 30 November 2020. Whilst we welcome this financial support, bear in mind that it is taxable.
Taxable SEISS grants
In fact, all SEISS grants are taxable. Both the tax and class 4 National Insurance contributions (NICs) are due in the 2020/2021 tax year. Remember to report all grant claims on your 2020/2021 Self-Assessment tax return. Then, make a note to pay by 31 January 2022.
How much will I receive?
The third taxable SEISS grant is worth 80% of average monthly trading profits. Paid as a single instalment, it covers three months’ worth of profits capped at £7,500 in total.
When to claim
Make your claim by 29 January 2021. If you did not claim either of the first two taxable SEISS grants you may be able to claim the third. Check to see whether you satisfy the criteria. Unfortunately, if you were ineligible for the first two grants, you cannot claim the third.
Revised eligibility criteria
Whilst taxable SEISS grants are based on information in your Self-Assessment tax returns, the eligibility criteria have changed. Qualification for the third grant is dependent on experiencing a new or continuing impact from coronavirus between 1 November 2020 and 29 January 2021.
To satisfy the criteria you must be trading and seeing reduced demand. Alternatively, you may have ceased trading temporarily due to Covid-19. Additionally, you must declare your intention to continue to trade. Finally, HM Revenue & Customs (HMRC) requires confirmation that you anticipate a significant reduction in trading profits.
Circumstances affecting eligibility
Understandably, some circumstances can affect eligibility for the third taxable SEISS grant. Have you had a child, for example? Are you a military reservist? Or perhaps you have loans covered by the loan charge? If so, check your eligibility. Further information is available at: https://www.gov.uk/guidance/how-different-circumstances-affect-the-self-employment-income-support-scheme
HMRC expects self-employed workers to assess Covid-19’s impact on their business. Always be honest and keep supporting evidence. When claiming the third taxable SEISS grant look to demonstrate that business activity was less than expected.
Fortunately, the government has pledged a fourth taxable SEISS grant. This will cover the three-month period February to April 2021. We await further details, including the level of the grant.
Potentially, you can seek additional support via Universal Credit. However, it will affect any tax credits you claim and may affect other benefits. Look into this carefully before applying for the third taxable SEISS grant.
Also consider other types of financial support for the self-employed:
- grants for businesses that pay little or no business rates
- Business Interruption Loan Scheme
- Bounce Back Loans
- Test and Trace support payments
Regrettably, we cannot file a claim on your behalf. We can offer guidance, though. If you need help to claim taxable SEISS grants, call us on 01785 243276.
Read more about the SEISS grants here.