I was heartened to hear the announcement from Rishi Sunak that many individuals will receive a second payment from the Self-Employed Income Support Scheme in August ...
Taxpayers should apply for a further 3-months of SEISS grant, which will be paid at a reduced level compared to the first. The first SEISS grant deadline is the 13th July 2020 so if you haven't already applied, then get on it soon.
If you wish to apply for the second payment, applications will open in August. Further details of the timings will be released by HMRC on the 12th June 2020, and I will write more after we know the full details. There will be a mini-budget announcement in early July designed to help stimulate the economy in combination with the second SEISS payment.
Instead of the previous 80% equivalent of the taxpayers' annual average profits, this one will be set at 70% and will be capped at £2,190 per month so the maximum amount payable will be £6,570 to cover the three month period.
HMRC factsheets confirm the same qualifying conditions for the second grant as was for the first. There are no indications that self-employed individuals who were excluded from the first SEISS grant will be eligible for this one.
Taxpayers will have to apply for this one in the same way as they did the first one and will need to confirm that their business has been adversely affected by the Coronavirus outbreak. In reality, this will likely be a checkbox on the application form, the same as for the original application.
The term 'adversely affected' is not actually defined in the HMRC factsheets which sets our the Self-Employed Income Support Scheme conditions, but guidance indicates it would mean a reduction or temporary halt in business activity due to:
- supplies not arriving
- fewer customers
- staff unable to work
Although there is no monetary threshold for this test, I'd recommend business owners keep records of how the business has been affected by the Coronavirus outbreak in case HMRC asks questions in the future. It's better to be safe than sorry as you don't want them asking for their money back in the future or issuing punitive tax penalties against you.
So far, 2.3 million claims for the Self-Employed Income Support Scheme have been made out of a possible 4.3 million self-employed individuals in the United Kingdom. For the other 2 million or so, their profits may be too high, or they simply haven't been affected by Coronavirus.
Don't forget that both Self-Employed Income Support Scheme grants are taxable and will be will need to be reported on your 2020/21 tax return. It is also outside the scope of VAT as it is not classed as turnover.
If you'd like to find out more about anything I've written here, do call me on 01908 774323 or leave a comment below and let's see how I can help you.