SEISS update and important information on reduction of trading profits test

Jan 26, 2021

HMRC has today sent the below update on the SEISS scheme:-

"The deadline for claiming the third SEISS grant is fast approaching. If your clients are eligible, they must make their claim on or before 29‌‌‌ ‌January 2021.

As with the first and second SEISS grants, the third grant will be subject to Income Tax and self-employed National Insurance and must also be reported on your clients’ 2020-21 Self Assessment tax returns (to be submitted by 31‌‌‌ ‌January 2022).

Confirming a significant reduction in trading profits

Before your clients make a claim for the third grant, they must decide if the impact on their business will cause a significant reduction in their trading profits for the tax year they report them in.

HMRC cannot make this decision on behalf of your clients because their individual and wider business circumstances will need to be considered when deciding whether the reduction is significant.

Your clients do not have to consider any other coronavirus scheme support payments they have already received when deciding whether they reasonably believe that they will suffer a significant reduction in trading profits due to reduced activity, capacity, demand or inability to trade due to coronavirus during 1‌‌‌ ‌November 2020 to 29‌‌‌ ‌January 2021 (period covered by the third grant).

Supporting your clients

We recently sent a letter to customers who we have identified as potentially requiring extra support. At the time of writing to them, the customers had yet to claim for the third SEISS grant, and we believe they may be eligible, depending on the circumstances of their business. The letter included details of the deadline for claiming the third SEISS grant, our digital claim service, and the number of a helpline for those requiring additional support.

Details of the extra support we can provide for your clients can also be found on GOV.UK.

The third SEISS grant and working parents

If your clients are unable to work because they have additional caring responsibilities due to school closures, and they meet all other conditions, they are eligible to claim, provided they reasonably believe that the impact of taking this time off will significantly reduce their trading profits for the year that they report them in. 

Details of the eligibility criteria can be found on GOV.UK.

Other types of work and the third SEISS grant

Due to the impacts of coronavirus, we know that some customers who are usually self-employed are also seeking other forms of work.

If your clients receive the grant they can:

  1. Continue to work.
  2. Start a new trade or take on other work including voluntary work and duties as a military reservist.

Your clients must also declare that they intend to continue to trade.

The fourth SEISS grant

Information about the fourth SEISS grant will be provided on 3‌‌‌ ‌March."