Expanded guidance on SEISS eligibility

Updated on 24 June 2020

HMRC has published examples to show when the “adversely affected” criteria for the first and second SEISS grants will be met. It confirms that those who are self-employed and able to return to work as normal in June will not be eligible for a second grant, although they can claim a grant for the first period.

Up until 13 July, SEISS allows self-employed individuals (including those trading as a partnership) to claim a taxable grant worth 80% of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits and capped at £7,500.

A second and final grant can be claimed in August 2020. It is worth 70% of average monthly trading profits and will also be paid out in a single instalment covering three months’ profits and is capped at £6,570. While eligibility for the second grant is the same as the first grant, it is a separate claim and those claiming will have to confirm their business has been adversely affected by COVID-19 on or after 14 July 2020.

HMRC’s examples confirm that individuals can claim for the second grant even if they did not claim the first grant, as long as their circumstances have changed due to COVID-19 and all other criteria are met.

The government has also announced that the SEISS will be changed to include some parents who have taken time out to have children and that self-employed army, navy and air force reservists who are currently ineligible for the SEISS as a result of their service will be able to access a grant.

The change will affect the eligibility criteria for the grants; new parents who did not submit a 2018/19 tax return, or whose trading profits were less than their other income in that year (the 50% test), may now be eligible.

If someone was ineligible for either of those reasons because they were taking time out to care for a newborn child, HMRC will determine eligibility on the basis of the 2017/18 and 2016/17 tax returns.

The change is expected to operate in a similar way for reservists but, in addition, income they have received as a reservist is likely to be disregarded when establishing eligibility.

HMRC is expected to update its guidance ‘How different circumstances affect the Self-Employment Income Support Scheme’ when further details are available.

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