Small businesses and entrepreneurs have arguably faced the biggest brunt of the economic aftershock of the COVID-19 pandemic. Following pressure from self-employment groups and trade unions, Chancellor Rishi Sunak introduced the Self-Employment Income Support Scheme (SEISS) to provide financial aid to self-owned businesses to help keep them afloat during the crisis.
Under this scheme, eligible self-employed workers can receive two grants from HRMC, which will be taxable, but need not be repaid.
What Is the Application Deadline For Each Grant?
The 13th July deadline for the first grant is fast approaching, the application system having gone live earlier in May. Self-employed workers can continue to apply for the first grant until this date.
HRMC recently announced that the Scheme would be extended until 19th October to allow people to apply for only the second and final grant.
However, the online service to process claims for the second grant has not yet been made available. It is expected to go live on 17th August. Even if business owners have not applied for the first grant, they can still claim the second grant by the October deadline, in case their operations have only been adversely affected by COVID-19 in this later phase.
How Much Does Each Grant Pay?
The first grant covers 80% of the average profit for three months, up to a maximum of £7,500, paid as a single lumpsum.
The second grant is smaller and will pay 70% of the average profit for three months, up to a maximum of £6,570.
When Will the SEISS Grant Be Paid?
For the first round of grants, HRMC aimed to pay out the approved amount within six working days of an application being completed and approved. While they are yet to confirm further details regarding the pay-out for the second grant, it is likely that business owners can expect a similar time frame.
What Are the Eligibility Criteria for Applicants?
HRMC determines eligibility based on the individual tax returns of each applicant and contacts them to let them know if they can apply. The eligibility criteria for receiving either or both of the grants are:
- The applicant has to have filed a tax return for financial year 2018/19 as a self-employed individual or a member of a partnership.
- The applicant’s annual trading profits must not exceed £50,000, and at least 50% of their total income must be generated from self-employment.
- The applicant must certify that their business has been adversely impacted by COVID-19*.
*Business owners applying for the second grant will need to confirm that their business has been adversely impacted (or continues to be impacted) on or after 14th July.
Upon application, HRMC will notify the applicant once the grant has been processed, and even provide information regarding how the value of the grant has been determined.
According to HRMC data, as of June, 2.4 million people, representing 70% of the total eligible population, have already claimed an SEISS grant, with an average value per claim of £2,900. The construction industry has had the highest proportion of claims, with around 800,000 workers applying for the grant.