The Third Self-Employment Income Support Scheme (SEISS) grant is open to applications from today, but if you are thinking of applying for it, be aware that there are now tougher criteria to consider ...
So, this means that the claimant should be truthful about their reduced business activity, capacity or demand between the 1st November 2020 and the 29th January 2021. Evidence should be kept to support this.
What does HMRC consider a significant reduction in trading? Well, they say that the cannot make this decision on behalf of an individual business because a wide range of circumstances needs to be taken into consideration; however, they have released guidance that offers a number of examples designed to help and inform.
As an example, a cafe owner who has lost customers due to government restriction on household mixing. This has reduced her takings, reducing her trading profits overall.
However, if that same cafe owner has increased her prices due to the loss of customers, and her takings remain essentially the same, she would not be eligible to claim.
A builder who had to self-isolate, but was able to rearrange his contracts would not be eligible because he hasn't lost any trade. Nor would an electrician who had to invest in PPE, but was able to continue working without a loss of business overall because only his costs have gone up rather than losing actual trade.
And as a final example, a dentist returning from a holiday abroad, needing to self-isolate for 14-days due to quarantine is also not eligible. Reduce demand due to self-isolation after travel is not included in the eligibility criteria.
The criteria for the third SEISS grant are different from the first and second grants, and you'll need to show this significant reduction in trading profits in your 2020/21 tax return although in certain cases, this may roll into your 2021/22 tax return.
The significant reduction in trading profits test now applies to the tax year as a whole, so you may need to do some forecasting of results to establish your eligibility. Also, it does seem highly unlikely that HMRC could enforce these new requirements as some 2021/22 tax returns could be submitted in January 2023.
Remember, if you weren't eligible for the first and second SEISS grants, you won't be eligible for this one either.
If you feel inspired to find out more about anything I've said here, do call me on 01908 774320 or leave a comment below and I'll be in touch as soon as I can.