Self-Employment Income Support Scheme (SEISS) Update & VAT Deferral New Payment Scheme

Self-Employment Income Support Scheme (SEISS) Update  

The rules on who is eligible to claim have changed. However, you will still need to have submitted a Self Assessment tax return for the tax year 2018 to 2019 showing self-employment income in order to claim (unless one of the existing exceptions applies).   

The third grant, which offers 80% of three months’ average trading profits, paid out in a single taxable instalment capped at £7,500, will be available covering the period from 1 November 2020 to 29‌ ‌January 2021.  

Self-employed people who are eligible and in need of support will be able to claim the third grant at any time from 30‌ ‌November 2020 to 29‌ ‌January 2021.   

Who is eligible

To make a claim for the third grant, you must meet a number of conditions, and make an honest assessment about whether you reasonably believe your trading profits will be significantly reduced due to coronavirus.   

As previously, the third grant will also be subject to Income Tax and self-employed National Insurance and must also be reported on 2020 to 2021 Self Assessment tax returns.   

As before, to make a claim for the third grant, you must:  

  • be a self-employed individual or a member of a partnership, and  
  • have traded in both the tax years 2018 to 2019 and 2019 to 2020. 

For the third SEISS grant you must also:  

  • either be currently trading but are impacted by reduced activity, capacity or demand, or have been previously trading but are temporarily unable to do so due to coronavirus   
  • you must also declare that you intend to continue to trade, and that you reasonably believe that the impact on your business will cause a significant reduction in your trading profits 
  • only claim if the reduction in profits is caused by reduced business activity, capacity or demand, or inability to trade due to coronavirus – reduction in profits due to increased costs (such as having to buy masks) does not count for this purpose.   

When deciding whether the reduction is significant, your clients will need to consider their wider business circumstances. 

HMRC expect claimants to make an honest assessment about whether they reasonably believe their trading profits will be significantly reduced compared to what they would otherwise expect to achieve during this period.  

The business must have been impacted on or after 1 November 2020. You must also keep evidence to show the impact and reduction in their business activity across the qualifying period.  

More Information

Full details of the third SEISS grant to support self-employed people affected by coronavirus (COVID-19) have been published on the government’s website.  To view this please click the button below.   

There will also be a fourth grant (covering the three-month period from Feb‌‌ruary 2021 to April 20‌‌21) – Information on this is yet to be published. 

VAT Deferral New Payment Scheme   

Businesses who deferred VAT due from 20‌‌‌ ‌March to 30‌‌‌ ‌June 2020 will now have the option to pay in smaller payments over a longer period. Instead of paying the full amount by the end of March 2021, businesses can make up to 11 smaller monthly payments, interest free. 

For more information including how and when to opt into the new payment scheme please click the button below.

 

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