HMRC have confirmed the online service for applications for the self-employed income support scheme (SEISS) is now open. Importantly, applications for the grant must be made by the individuals and cannot be handled by accountants or tax advisers.

This is the FOURTH grant available for the self-employed in what has been a bit of a lifeline for some sole traders. Applications are to be submitted by 21/06/21.

Eligibility for the grant is restricted to self-employed individuals and members of partnerships. These grants are NOT available if you trade through your limited company which has been a bit of a sore point for sole directors who appear to have been somewhat overlooked by the chancellor during the pandemic. Trading profits must no more than £50,000 and equal to or more than your non-trading income.

The grants are capped at £7,500 and calculated at 80% of three months’ average trading profits with a fifth grant to follow covering May to September 2021.

The fifth and final grant will be capped at the same £7,500 figure and also calculated from 80% of three months’ average profits and is for those who have suffered a turnover reduction of more than 30% due to the pandemic. Any individuals or partners who have had a reduction in turnover of less than 30% will be capped at £2,850 and calculated at 30% of three months’ average trading profits…so beware!

Neither grant requires anyone to have previously claimed an SEISS grant but you may have to prove your business has been adversely affected by the pandemic – HMRC has provided some guidance on what is meant by this:

If you’re currently trading but have reduced demand

You must keep any evidence that your business has had reduced activity, capacity or demand due to coronavirus at the time you made your claim, such as:

  • business accounts showing reduction in activity compared to previous years;
  • records of reduced or cancelled contracts or appointments; and
  • a record of dates where you had reduced demand or capacity due to government restrictions.

If your business is temporarily unable to trade

You must keep evidence if your business has been unable to trade due to coronavirus, such as:

  • a record of dates where you had to close due to government restrictions;
  • NHS Test and Trace communications – if you’ve been instructed to self-isolate in-line with NHS guidelines and are unable to work from home;
  • a letter or email from the NHS asking you to shield;
  • test results if you’ve been diagnosed with coronavirus; and
  • letters or emails from your child’s school with information on closures or reduced hours.

To make a claim, applicants will need the following:

  • Self-Assessment Unique Taxpayer Reference (UTR);
  • National Insurance number;
  • Government Gateway user ID and password; and
  • UK bank details including account number, sort code, name on the account and address linked to the account.

Only provide bank account details where a Bacs payment can be accepted.

There is no doubt in my mind that HMRC will be checking these claims and will take action against fraudulent claims so please, please, please keep any evidence you can that shows a reduction in activity. This can include bank accounts with less activity in comparison to previous years, records of reduced or cancelled contracts/appointments or records of reduced demand or capacity due to restrictions.

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