Applications are now open for the third SEISS grant for self-employed people affected by coronavirus (COVID-19).
The rules on who is eligible to claim are different to those for the previous SEISS grants. However, a Self Assessment tax return for the tax year 2018 to 2019 showing self-employment income will still need to have been submitted in order to claim.
The third SEISS grant will be based on:
- 80% of three months’ average trading profits,
- paid out in a single taxable instalment
- capped at £7,500, and
- will cover the period from the 1st of November to the 29th of January 2021.
Self-employed people who are eligible will be able to claim the third grant at any time from the 30th of November 2020 to the 29th of January 2021.
The grant will also be subject to Income Tax and self-employed National Insurance. And it must be reported on 2020 to 2021 Self Assessment tax returns, due by the 31st of January 2022.
How to get ready for the third SEISS grant
- Check whether you are eligible to claim, as the eligibility rules are different to the previous SEISS grants.
- Be aware that, like SEISS 1 and 2, tax agents cannot claim this grant on behalf of clients; they must do so themselves. If an agent tries to make a claim on a client’s behalf, it will trigger a fraud alert that will delay the payment. Applying online is quick and easy.
Who is eligible for the third SEISS grant
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 SEISS grant will be subject to Income Tax and self-employed National Insurance and must also be reported on 2020-2021 Self Assessment tax returns.
To make a claim for the third SEISS grant, you must – as previously:
- be self-employed or a member of a partnership – you cannot claim the grant if you trade through a limited company or a trust
- have traded in both the tax years 2018 to 2019 and 2019 to 2020.
For this third SEISS grant you must also now:
- either be currently trading but are impacted by reduced business activity, capacity or demand, or have been previously trading but are temporarily unable to do so due to coronavirus
- declare that you intend to continue to trade, or restart trading, and that you reasonably believe that the impact on business will cause a significant reduction in 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 make a business eligible for the third SEISS grant.
Assessment for third SEISS grant
When deciding whether the reduction is significant, you will need to consider your 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.
Their business must have been impacted on or after the 1st of November 2020. You must keep evidence to show how business has been impacted by coronavirus, resulting in reduced activity, capacity or demand, or a temporary inability to trade.
More information and further support
More information and examples are available on GOV.UK to help you check eligibility to claim.
HMRC are contacting all self-employed people in the UK that may be eligible to let them know about the third grant.
A fourth grant will also be available from February 2021 to April 2021 and more information about that will be available nearer the time.
Help and support
If you need more information on the third SEISS grant or any aspect of your Self Assessment Tax contact me now.
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