The first coronavirus self-employment income support scheme (SEISS) grant period has already passed, having closed on 13 July. The second, and final, period for claiming a grant opened on 17 August, and will close on 19 October. This grant is for businesses that have been ‘adversely affected’ since 14 July.

Although the scheme has come in for considerable criticism because of the number of self-employed people who have been unfairly excluded, for those who are eligible the second grant is worth 70 per cent of the claimant’s average monthly trading profits. It is paid out in a single instalment covering 3 months’ worth of profits and is  capped at £6,570 in total. It is fully taxable as income of the business.

Unlike the coronavirus job retention scheme (CJRS), where furloughed employees are not permitted to work in periods for which their employer receives furlough payments in order to fund their furlough period wages, the SEISS recognises that self-employed individuals would need to undertake at least some work to maintain their business  and may have just received less income while working as a result of the pandemic.

This could be because they were unable to work, either as a result of contracting the virus themselves, or because they were self-isolating due to someone in their household having the virus. Alternatively, it could be due to government rules around which businesses could open, the impact of social distancing, or the cost of additional protective equipment.

The Government provides some useful examples of when it might be appropriate to claim in its online guidance. 

While the rules are generous for those who can claim, it is important to note that: 

1. The scheme has an income cliff-edge of £50,000. While no one expects the Government to fund large self-employed earnings, it doesn’t make sense that someone earning £51,000 can claim nothing while someone with £50,000 of earnings can claim up to £6,570.
2. The scheme requires that the self-employed income of the individual should be more, or at least equal to, their other income. For example, if someone has undertaken extra employed work to offset their fall in self-employed income, they will not be eligible for help under the SEISS if their other income is more than the self-employed trading income. 
3. Individuals have to make their own claim, rather than through an agent or accountant. This means they will require sufficient IT skills, have online access and, importantly, have a Government Gateway account. All these small hurdles could cause delay and, if left too late, could result in the deadline being missed.
4. Evidence of the adverse impact of the pandemic will need to be retained and we expect that some individuals will be asked to produce this in the future.

While the claim period runs until 19 October, it makes sense to submit claims as soon as possible, rather than waiting until the deadline.

 

Noel Guilford