The Government grant for self-employed individuals whose businesses have been adversely affected by coronavirus – is made up of two grants. The first grant closed on 13 July 2020, but the second and final grant opened for applications on 20th August 2020.
What you need to know about the Second Grant
•Grants are based on your profits over three tax years. This is based on an average of the tax returns for 2016/17, 2017/18 and 2018/19. If you did not trade in 2016/17, it’s based on the average of 2017/18 and 2018/19. If you did not trade in 2017/18, the amount is based on 2018/19 only – even if you traded in 2016/17.
•It’s worth up to 70% of your average monthly trading profits over the tax years ending in 2017, 2018 and 2019 (more on that below). It’s paid in a single instalment of up to £6,570 (£2,190/mth), and it’s designed to cover three months worth of profits. As it’s a grant, you don’t need to pay it back.
•You don’t need to have claimed the first grant to receive the second grant. And if you’ve claimed the first, you can claim the second as long as you’re still eligible.
•You must have filed a tax return for 2018/19. This means you must have been self-employed prior to 6 April 2019. The last possible moment to file a 2018/19 tax return was 23 April 2020 (the deadline had been extended from 31 January 2020). If you only had a few months’ self-employment on your 2018/19 return, this is counted as your total profit for the year – the Government won’t pro-rata it based on your monthly profits.
•You must earn more than 50% of your total income from self-employment. To check this, HMRC will first look at your your 2018/19 tax return to see if it was the case then. If you’re not eligible based on 2018/19 alone, it will then look at the tax years 2016/17, 2017/18 and 2018/19 to see if the average of your trading profits across the three years were more than 50% of your total income.
Your average trading profit must be less than £50,000/year. This is essentially a ‘cliff-edge’ requirement – so those whose average annual trading profit is more than £50,000 (to be specific, £50,000.01 and above) won’t be able to get any support from this scheme.
•You CAN keep working if you claim the grant. You do not need to prove coronavirus impact, though you need to declare your business has been impacted on or after 14 July 2020. HMRC will check for fraudulent claims.
•You can also apply for and get universal credit (SEISS doesn’t make you ineligible). But once you start receiving self-employed income support too then this will be classed as income, meaning the amount of universal credit you receive will decrease. But you will NOT have to pay back previous months of universal credit because of your SEISS payment.
•Applications and the last date to apply is 19 October 2020.