As part of the Chancellor’s winter economy plan, he announced an extension to the self-employment income support scheme (SEISS). Since this time, he has gone on to increase the amount of support offered under the grant on three occasions.
The extension to the SEISS is limited to self-employed individuals who:
- qualified for the SEISS under the existing rules for the initial grants (although they do not have to have made a claim under the scheme); and
- are actively continuing to trade and intend to continue to trade but are facing reduced demand due to COVID-19 in the qualifying period; or
- were previously trading but are unable to do so temporarily due to COVID-19.
Full details on how the Government will assess whether the last two tests for eligibility, as set out above, will be met is expected to be published shortly. It is widely anticipated, however, that the final test will be more narrowly defined than the current requirement of being ‘adversely affected’ when claiming the initial two grants.
The scheme will last for six months, from November 2020 to April 2021. Two further taxable grants will be available, each covering a three-month period.
The third grant under the SEISS will cover 80% of average monthly trading profits, paid out in a single instalment covering the first three months’ worth of profits, and capped at £7,500 in total. Originally announced at 20%, the Chancellor subsequently doubled this to 40%, before increasing it to 55% and has now increased this again following the announcement of the furlough scheme extension to March 2021.
The fourth and final grant will cover the second three-month period from the start of February until the end of April, although the amount of this grant will be announced in due course.
The claims window has also been accelerated, with it now being possible to make a claim from 30 November, rather than 14 December as originally announced. It is not clear, however, if the grant payable will be increased if the lockdown is extended beyond 2 December and how this will impact people who have already claimed the grant prior to any announcement of such.
As with previous grants under the scheme, they should be treated as taxable income and are also subject to national insurance contributions.