Throughout the whirlwind of Covid-19, thankfully, a significant amount of financial support has been available to aid small businesses and those within the self-employed sphere. Unfortunately, some businesses, those which have fallen as ineligible have suffered, which is a further blog topic in itself.
Yet, those who have been eligible have benefited from the Self-employed Income Support Scheme (SEISS), which this far, has offered 3 independent grants. Every day the news is changing, the pandemic is continuing to knock the economy, lockdowns are prolonging, and financial worries are rising. Understandably, if you’re self-employed, it’s likely that your business may be paused, that your work has halved or that contracts have vanished overnight, causing significant stress.
Down to this unprecedented time, it’s crucial to keep a hold of the support available, relevantly the Self-employed Income Support Scheme (SEISS). If your business has recently plummeted, it’s also important to remember that while you may have overlooked grants 1 and 2, the deadline for grant 3 is still open, offering financial support to cover the last 3 months of business.
Here’s an update to the Self-employed Income Support Scheme (SEISS), offering guidance on current and impending support for small businesses, self-employed individuals and freelancers.
If you require any degree of support with your accounts or financial forecasts, we at The Financial Management Centre are here for you.
Support for small businesses and self-employed individuals
So far, as we’ve mentioned above, support has been available throughout the pandemic via the Self-employed Income Support Scheme (SEISS). Starting off as an equal offering of furlough, 3 grants in total have been provided to those in need, standing as taxable.
Understandably, some individuals have unfortunately fallen outside of the eligibility bracket for SEISS, which we appreciate is frustrating. However, for established small businesses and self-employed individuals, who’ve traded within 2018-2019 and 2019-2020 tax years, support has been increased for the current stream of SEISS, which you may have heard in a recent government announcement.
Thus far, your business may have been active. Yet, if you’re now struggling, please be reassured that if you’re eligible, the scheme is still available, where an additional grant is also set to cover the up-and-coming quarter. To benefit from the Self-employed Income Support Scheme (SEISS), claims must be made prior to the deadline on 29th January 2021.
Update to the Self-employed Income Support Scheme (SEISS)
Through previous government announcements, an update to the Self-employed Income Support Scheme (SEISS) has been made, adapting both the level of support and also the viability of self-declaration.
Firstly, support has increased from the planned figure of 40% to 80% of average trading profits via SEISS. The third grant, which is still available will have covered trading losses from November 2020 to January 2021. The recent changes made by the government now means that a cap of £7,500 is set in place as the combined figure of quarterly average trading profits.
Secondly, while eligibility has remained the same across the board, the self-declaration section has adapted to include a reasonable belief. While reasonable belief will be based on own judgments, claimants must believe that significant losses will be experienced down to a lack of or the inability to trade in relation to Covid-19. This part of the claim process has adapted since the second grant, where sensible evaluations are being asked of claimants.
Some examples have been provided by the government to support the new update of reasonable belief, linked to the Self-employed Income Support Scheme (SEISS).
The update to the Self-employed Income Support Scheme (SEISS) also highlights how a fourth grant will soon be available, covering February to April 2020. Yet, as the scheme is continually changing in relation to the impacts of Covid-19, exact figures or eligibility details are yet to be shared. Once this information is available, we will update you with further news regarding SEISS.
Eligibility for the Self-employed Income Support Scheme (SEISS)
Down to the fact that many individuals are new to the scheme, and in relation to ongoing change, below we share the eligibility for the Self-employed Income Support Scheme, also outlining the update to the self-declaration section. Alternatively, you can check your eligibility online.
Eligibility for SEISS includes:
- You must be registered as self-employed, operating as a sole trader or as a small business. Unfortunately, limited companies are not covered under this
- You must have traded in both 2018-2019, and 2019-2020.
- All relevant self-assessments and tax returns must have been completed.
- Your average trading profits must be less than £50,000 per year.
- 50% of your earnings must come from self-employment.
- You must be currently trading but have either been impacted by Covid-19 where trading now isn’t possible or where work/demand has reduced.
All of the above points must be met, which was the case for earlier claims of the Self-employed Income Support Scheme (SEISS). An Update to the Self-employed Income Support Scheme now also includes a self-declaration, which you must declare that:
- You intend to trade for the future tax year.
- You reasonably believe that a significant loss will be experienced within the timeframe of the 3rd
As financial support spans across different sized businesses and industries, the word ‘significant’ will need to be gauged on a personal level. If this applies to your business, you can still claim SEISS, up until 29th January 2021.
Financial support here at the Financial Management Centre
Like the previous year, we understand that this year will be very different for the self-employed. With this in mind, if you require any form of financial support, whether that’s in relation to your accounts, to future financial forecasts, or business investments, we can assist.
In the meantime, keep your eyes out for any further updates to the Self-Employed Income Support Scheme, which we will share here on our blog. Further details around the next grant will soon be available, helping to secure greater financial support for the self-employed and small business owners.