The Self-Employment Income Support Scheme Grant Extension provides financial support to the self-employed in the form of two grants, each available for three month periods covering 1 November 2020 to 31 January 2021 and 1 February 2021 to 30 April 2021.
To make a claim for the third grant a business must have had a new or continuing impact from coronavirus between 1 November 2020 and 29 January 2021.
The third taxable grant is worth 80% of an individual’s average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, capped at £7,500 in total. This is identical to the way in which the first grant (paid out back in May/June 2020) was calculated.
Details regarding grant #4 (covering the period from 1 February 2021 to 30 April 2021) have not as yet been released – watch this space!!
Reasonable belief
In order to claim, an individual must reasonably believe that they will suffer a significant reduction in trading profits due to reduced business activity, capacity or demand or inability to trade due to coronavirus during the period 1 November to 29 January 2021. A record must be kept to support how the business has been impacted by coronavirus resulting in less business activity than otherwise expected.
Significant reduction
Before a claim is made, an individual must decide if the impact on the business will cause a significant reduction in trading profits.
An individual should wait until there is a reasonable belief that trading profits are going to be significantly reduced, before filing a claim.
HMRC provides examples here to help individuals assess whether a claim can be made.
WardWilliam’s Creative view
Both of the above highlighted issues are key with regards to claiming the third grant. As you can see, the criteria is a lot stricter than it has been for grants #1 & #2.
In general, our advice is to wait until you have the reasonable belief that there will be a significant reduction in trading profits due to reduced business activity, capacity or demand or inability to trade due to coronavirus. The claims need to be made before 29 January 2021 so there is a bit of time until the decision needs to be made.
In some businesses, this won’t be necessary – you will know that there is a significant reduction in trading profits due to reduced activity, capacity or demand. Or if you can’t trade at all at present due to COVID19 restrictions and this will result in a significant reduction in trading profits.
Others, however, should use caution and make the claim when they are more confident that they have this reasonable belief that HMRC have outlined.
We would suggest that you review HMRC’s examples via the link above and, if you do make the claim, do so at a time when you are confident in the claim you are making and you have the evidence to support the claim.
How to claim
The online service for the third grant is now available and claims for the third grant must be made on or before 29 January 2021.
Please feel free to get in touch with Tom, Erin or any of the team if you have any queries on the above. If you would like to learn more about our self-employed services then visit our website.
