Self-Employed Income Support Scheme Extended
The online service for the third grant under the Self-Employed Income Support Scheme (SEISS) is now available and will remain open until 29 January 2021.
The SEISS was extended to provide additional financial support to businesses over the winter period, although there are tighter rules in place for paying the third grant.
Unlike the first two grants that were paid earlier this year, the third grant comes with two extra conditions that have to be met.
To be able to claim for the third grant, you must either:
- be currently trading but are impacted by reduced demand due to coronavirus, or
- have been trading but are temporarily unable to do so due to coronavirus
You must also:
- intend to continue to trade
- reasonably believe there will be a significant reduction in your trading profits due to reduced demand or your inability to trade
HMRC says it expects claimants to make an honest assessment about whether they reasonably believe their business will have a significant reduction in profits.
For further explanations and examples on the extra criteria, please see the Government website here.
Potential Problem Area
A key sticking point for some potential claimants of the third grant is that the “significant reduction in trading profits” criteria applies to the whole accounting period.
So if you have a 31 March 2021 or 5 April 2021 year end, the reduced trading profits will be reflected in the results contained in the 2020/2021 tax return. But where, say, your year end is 30 April 2021, the results will not be declared until the 2021/22 tax return.
That means claimants will have to forecast their results in order to claim.
Which means it is open to question as to how HM Revenue & Customs could enforce the new requirements when many 2021/2022 tax returns may not be filed until January 2023.
If you have any questions relating to this scheme, the extension or your eligibility please contact your usual Haines Watts contact.