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Third Grant – Self-employed individuals

Self-employed workers are now able to apply for the third round of coronavirus support from the Government.

After the first lockdown, the self-employment income support system (SEISS) has been in place. It enables self-employed individuals whose company has been affected by the pandemic to request government money.

 Who can claim?

  • have previously qualified for the first and second grants of the Self-Employment Income Support Scheme (although they do not have to have claimed the previous grants)
  • declares their intention to continue trading and either:
  • are actively trading at present but are affected by decreased demand due to coronavirus.
  • were previously trading but are unable to do so temporarily due to coronavirus

What help is available for self-employed workers from November?

As part of the Winter Economy Programme, self-employed employees can get two more SEISS grants. The degree of the third SEISS grant, however, has been tweaked many times.

The Chancellor raised the grant from 20 percent to 40 percent on 22 October, to a maximum of £ 3,750.

Then, on 2 November, this moved to cover 80% of November’s average income, dropping to 40 percent in December 2020 and January 2021, up to a maximum of £ 5,160.

The third grant opened for applications on 30 November. There will be a fourth grant covering a percentage of average income spanning February to April 2021, but it is not yet known how much this will cover or when the deadline for applying will be.

Who is eligible for the SEISS?

The Chancellor says that the measures he is introduced will benefit 95% of self-employed workers, but not everyone will be eligible.

To apply, you must be a self-employed individual or a member of a partnership and:

  • Traded in the tax year 2019-20 and intend to continue trading in 2020-21
  • Have trading profits of less than £50,000 a year
  • Earn most of your income (i.e. 50%or more) through self-employment
  • Have filed a tax return for the 2018-2019 tax year. Anyone who missed the 31 January deadline was given four weeks from 26 March to file their 2018-19 return and benefit from the scheme.

Who isn’t eligible?

  • You will not be eligible for the first, second or third grants if any of the following apply:
  • You started your trade after 5 April 2019 (i.e. you did not trade in the tax 2018-19).
  • You did not submit your 2018-19 tax return by 23 April 2020.
  • Your trading income forms less than half of your total income (for example, your main income comes from employment, which you top up with a smaller amount from self-employment).
  • You traded in 2016-17 and 2018-19 but not 2017-18; and you do not meet the first test of the profit condition (i.e. in 2018-19 your trading profits were more than £50,000, or less than your non-trading income in that year).
  • You are a director of a limited company (though you may be eligible for some support under the Job Retention Scheme).
  • You operate a Furnished Holiday Letting business.
  • You are operating a trade through a trust.

Other points to note:

  • In calculating eligibility and the amount which can be claimed, HMRC will not consider any self-assessment returns submitted after 23 April 2020.
  • Claims based on late returns submitted between 26 March and 23 April 2020 will be subject to additional anti-fraud checks.
  • If you amend a submitted return after 26 March 2020 any changes will not be considered when working out your eligibility or amount of the grant.
  • HMRC will only look at your original return if a tax return is under enquiry, or the subject of a contract settlement.
  • If you are taking a break from your trade due to having a baby or adoption, or have done so since 6 April 2019, you will still be eligible. Claiming maternity allowance will not affect eligibility.
  • The scheme is open to non-residents, and those claiming the remittance basis, but they will be required to certify that their trading profits are at least equal to their other worldwide income (including overseas income) for any relevant tax years.
  • Grants under the scheme are not counted as ‘access to public funds’ and can therefore be claimed under all categories of work visa.
  • Special rules apply to those who would not normally be eligible due to the effect on their 2018/19 profits of having a child or undertaking military reservist activities.

Can I claim from this scheme and be furloughed?

If you already have more than one job, and are both employed and self-employed, as long as the income from your self-employment makes up at least 50% of your earnings, you could feasibly take the self-employment grant and be furloughed from your employment.

How do I claim?

The online claims portal for the third grant will open on 30 November 2020 and and close on 29 January 2021. Claims for the second grant opened on 17 August and closed on 19 October. Claims for the first grant opened on 13 May and closed on 13 July 2020. Those who are unable to claim online should call the dedicated SEISS helpline to make their application.

In order to make a claim individuals need all of the following information:

  • Your self-assessment Unique Taxpayer Reference (UTR) number;
  • Your National Insurance number;
  • Your Government Gateway user ID and password; and
  • Details of the bank account you want the grant to be paid into.

There is no requirement to self-assess the amount to be claimed.  You should be told straight away if your claim is approved, how much you are eligible for and how this has been calculated, with payment following within six working days.  Payment is by way of a single instalment directly into your bank account. If you do not agree with the amount HMRC has calculated, you should complete your claim anyway and then ask HMRC for a review. For the first round of grants HMRC provided an online form which individuals and their agents could use to request a review.

This form has been withdrawn for the second and subsequent rounds, and reviews can only be requested by contacting HMRC. Both individuals and their authorised agents can request a review. You must keep a record of the amount claimed, your claim reference number and evidence that your business has been adversely affected by coronavirus.

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