Self Employed Income Support Scheme Reminders

As more and more businesses are being able to function normally with the restrictions changing, we wanted to remind you of the deadlines and changes to the Self Employment Income Support Scheme.

The first grant of the scheme allows you to claim a taxable grant worth 80% of your average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total.

If you want to claim the first grant you must make your claim on or before 13 July 2020.

The scheme announced that it was being extended on 29 May. The second and final grant will be a taxable grant worth 70% of your average monthly trading profits, paid out in a single instalment covering a further 3 months’ worth of profits, and capped at £6,570 in total.

You can claim for the second and final grant even if you did not make a claim for the first grant, and will be able to do so from 17 August 2020 when the online service will be available.

In order to qualify for the second grant, businesses need to have been adversely affected from 14 July.

Given a lot of businesses and places of work are now open that were not during the claim period covered by the first grant, the government’s expectation is that a lot of businesses that qualified for the first grant will not qualify for the second grant.

However, the scheme will be open to anyone who met the relevant pre-virus trading criteria which therefore includes everyone who was entitled to claim the first grant. The crucial point here is although a business can access the scheme and make a claim, it does not mean they are entitled to do so.

Please see here to find out more information on eligibility and what the government considers adversely affected to mean.

In short, if challenged, you would need to be able to demonstrate that you suffered a significant reduction in custom and income, a significant increase in operational costs (from 14 July onwards), or there was a significant period of time during which you were unable to work by virtue of being ill or having to stay at home and self-isolate.

There is no quantitative definition for what a significant decrease in custom or income is, and so this point is very much open to the interpretation of the claimant. From a scientific and statistical perspective, I recall from my University days changes of below 5% are regarded as insignificant. There are also aspects of tax rules and regulations that 20% can be considered to be a significant amount. As such, my view is that you will be entitled to claim if you can demonstrate that post 14 July income/custom is down by more than 20% or operational costs are up by more than 20%, compared to a normal pre-virus period of trading.

The online claims service for the second grant will open on 17 August, and the scheme will remain open until 19 October. A business would need to demonstrate it has been adversely affected at some point during this period.

I have no doubt HMRC will in the coming months check whether a large number of claimants were eligible for the grant, and are likely to financially penalise those who clearly were not. As such, please be careful you are happy you satisfy the criteria to submit a claim and can prove this is the case before doing so. We have rather been frozen out of the process for practical reasons, but would be pleased to chat the matter through with anyone who is uncertain.

If you have any questions or would like to discuss your situation with a member of our team you can call us on 01243 782 423 or complete our short contact form!