SEISS has provided help to self-employed people affected by the COVID-19 pandemic, but a major talking point when it comes to the Government support has been eligibility. While some have found themselves consistently outside of the net, others may find their change of circumstances could mean they are entitled to support. HMRC has outlined a wide range of eligibility criteria which apply to a self-employed person’s ability to claim the grant.
Firstly, the idea of reasonable belief is one which states a self-employed person must think they will suffer a significant reduction in their trading profits.
This is due to a wide range of contributing factors, including reduced business activity or demand, or the inability to trade between February and April 2021.
Of course, when claiming the grant it may not have been possible for individuals to say for certain whether they would suffer reduction in trading profits.
But HMRC has said it expects the self-employed to make an “honest assessment” about the matter.
In a similar sense, people will need to provide evidence which shows their business has been impacted by COVID-19.
This must prove a business has had less activity than they otherwise would have expected without the pandemic.
When it comes to the understanding of what constitutes a “significant reduction” there is also guidance to help self-employed individuals.
Before someone makes a claim they will need to decide if the impact on their business between February and April 2021 is likely to cause a reduction in their trading profits for the tax year a person is reporting them in.
HMRC explains this is at the discretion of the self-employed person, as individual and wider circumstances have to be brought into account.
Before making a claim, then, people should wait until they have secured a reasonable belief their trading profits will be significantly reduced.
When working this out, individuals are not required to consider any other COVID-19 support payments received.
HMRC has cited an example of this, stating: “A cafe owner has fewer customers due to Government restrictions, and is only allowed to offer take-away service, which reduces her takings.
“She reasonably believes this will significantly reduce her trading profits. She is eligible to claim the fourth grant.”
The fourth grant of SEISS has been calculated by HMRC at 80 percent of three months worth of average trading profits.
This is to be paid out in a single instalment, which is capped at a total of £7,500.
In the future, there will also be a fifth and final grant of SEISS to provide the self-employed with support which covers up until September.