Considering the SEISS - are your clients eligible for a second grant?

24 Aug 2020

From 17 August 2020, the self-employed are able to claim a second support grant under the Self-Employment Income Support Scheme (SEISS). This is deemed to cover the period consisting of June, July and August.

Claimants do not need to have claimed the first grant in order to claim the second. They can claim any time between their allocated date and 19 October 2020. HMRC has reminded agents that they cannot make a claim for their client as this will trigger a fraud alert and lead to a delay in the claim.

The grant will be for 70% of average monthly trading profits for three months, subject to a cap of £6,570. The eligibility criteria are the same as for the first grant. Therefore, those not eligible for the first grant will generally also not qualify for the second.

To check eligibility, see here.

However, the second grant claim has an additional time-sensitive requirement to be confirmed when verifying that the business has been adversely affected. To qualify, an individual must confirm that they are adversely affected on or after 14 July 2020.

What does 'adversely affected' mean?

There are two categories:

  • unable to work; or
  • business continues to be affected.

'Unable to work' is classified as:

  • shielding or self- isolating
  • on sick leave because of COVID-19
  • having caring responsibilities because of COVID-19.

'Business continues to be affected' is where:

  • work is scaled down;
  • there is a temporary stop to trading; or
  • the business incurred additional costs because the supply chain has been interrupted; there are fewer or no customers or clients; employees are unable to come in to work; one or more contracts have been cancelled; the business had to buy protective equipment so they could trade following social distancing rules.

HMRC states: 'There is no minimum threshold over which a business's income, costs or activity need to have changed by, but your clients will be asked to keep appropriate records as evidence of how their business has been adversely affected.'

HMRC has provided some example scenarios of when the second grant may or may not be claimed, including:

'A builder worked on short-term contracts on different building sites. She only had half the work she would normally have in April 2020 and May 2020 because some of the building sites were closed. She was able to work as normal from June 2020 because the building sites reopened.

She was eligible for the first grant but should not claim the second as she does not satisfy the adversely affected condition on or after 14 July 2020.'

For additional examples, see here. For further information, including details needed for a claim, see here.

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