The third round of coronavirus support from the government worth up to £7,500 can be applied now by self-employed workers.

To assist businesses negatively impacted due to Covid-19 government introduced self-employment income support scheme (SEISS). SEISS gives grants and help those self-employed workers who cannot earn what they used to because of the pandemic.

The SEISS contains four taxable grants, each available for periods of three months. Two rounds of grants have already been given. On 13th July applications for the first grant closed. Applications for the second grant opened on 17th August and closed on 19th October 2020. On 5th November 2020 the third SEISS grant was announced by the UK Government. Applications for the same will be accepted from 30th November. The third SEISS grant covers the period 1 November 2020 to 31 January 2021.

Eligibility Criteria:

Self-employed workers need to be eligible to apply for SEISS. This is necessary to avoid fraud. The eligibility criteria are as below.

• - You must be eligible for the first two grants
• - It is fine if you were eligible but didn’t claim
• - You must have declared that you intend to continue trading
• - You are actively trading and your income was impacted due to Covid-19
• - You started trading before April 6, 2019 and filed tax return for 2018-2019
• - Half of your total income must be from your business
• - Your profit from trading must be less than £50,000 a year

Pregnant women were not eligible for the first grant but now they are eligible after the change in rules on 17th August. Maternity allowance can still be claimed.

Self-employed parents who may not have files their taxes due to various reasons from the birth of their child to the need to take care of their child under one year or adopted child who had been there with them for under a year, can now apply if they had been self-employed in 2017/18 and had submitted a tax return for the year before April 23 2020.

An online form was to be filled by New parents to verify the information about their new child before October 5 2020. Child's full name and date of birth, the date of adoption, child benefit number and birth certificate was required apart from letting HMRC know if they were claiming maternity allowance.

Military reservists were previously excluded from the scheme but can now apply for help if they were self-employed and had carried out reservist activities for at least 90 days during the period your 2018/19 profits are calculated.

However, some self-employed workers cannot apply like those who are company directors or run their businesses as limited companies.

Also, you need to have evidence like accounts, dates of business closures or confirmation of Covid-19 related loans to prove the reduced demand. If you incurred increased cost due to the purchase of face masks and cleaning supply, it would not be considered reduced demand and so you are not eligible for this grant.

How much will you get:

A single payment of 80 percent of average trading profits, up to a maximum of £7,500 for that period will be given. Earlier the grant was set to be worth £3,750 and was increased to £5,160 early in November. But now, Mr Sunak increased it to 80% of trading profits for November to January (up to £7,500).

Average Profits:

The average of the three previous years will be calculated. The grant will be based on this average profit of the three years from 2016 to 2019. If you traded only a year or two like only in 2018-19 then average will be considered only of that period. The grant is subject to tax and NI contributions.

How to claim:

Make your claim via the Gov.uk website. Keep you UTR, NI number, Government Gateway user ID and password and UK bank details.

A fourth grant covering February to April 2021 has also been announced.

The grants don't have to be repaid if you’re eligible. Nevertheless, it will be subject to income tax and self-employed national insurance.

Income-tax deferrals (till January 2022), Rent support (protection from eviction until the end of June) Coronavirus business interruption loan scheme (of up to £5million for up to six years with the government guarantee up to 80 percent), Grants of up to £10,000 (to help with ongoing business costs) VAT payments (can be deferred for three months), Tax bill help (can ask HMRC for a “time to pay” arrangement), Business rates holiday (12-month) are some of the measures to help self-employed workers and businesses.

Contact us for Tax Services. We can prepare your self-assessment keeping in mind all the benefits you can avail and submit it to HMRC.