The second SEISS grant can be claimed from now until 19 October. The system is open, but they appear to be phasing applications, so subject to any later date you've personally been given on an email from HMRC.
The grant is not repayable, assuming it has been correctly claimed, but is subject to income tax and self-employed NICs (National Insurance Contributions).
If you didn't claim for the first grant, maybe because your business wasn't then 'affected' by COVID-19, you can still claim for the second grant if you are now eligible. As the HMRC website says "You can make a claim even if you did not make a claim for the first grant if your business has been adversely affected on or after 14 July 2020." You can no longer claim for the first tranche unless some specific circumstances sush as pregnancy.
Eligible individuals must be deemed “self-employed” under Schedule D as a sole trader or partner in a partnership, with various other conditions. Those eligible are being contacted by email by HMRC and told:
“You will need to confirm your business has been adversely affected by coronavirus (COVID-19) at any time since 14 July. This typically means that your business has experienced lower income and/or higher costs because of coronavirus (COVID-19) at any time since 14 July.
As the person who knows your business best, we expect you to make an honest assessment about whether it has been adversely affected. There is no minimum threshold over which your business's income or costs need to have changed. You will need to keep a record of evidence of how your business has been adversely affected.”
This second grant was announced back in May, as the “second and final grant”.
As the first grant was towards the end of May, two months after lockdown on 23 March, before which many businesses were already adversely affected:
- The first grant was announced in March as "will cover the three months to May", i.e. March, April and May
- The second grant is therefore effectively for June, July and August
"[In addition to loans available to businesses, including the self-employed,] the only non-repayable grant is the Self-Employed Income Support Scheme (SEISS) for sole traders and partners, which is taxable. It is this that Rishi Sunak, the Chancellor, extended yesterday 29 May.
Whilst a second SEISS grant is very welcome, there are four [indeed five] problems:
- We need to bear in mind that SEISS is based on taxable profits, and then currently only 80%, reducing to 70% for the second tranche. Insurance premiums, web sites and other committed business expenses are not covered. Some commitments are typically monthly, otherwise in an annual lump that could be happening around now.
- The self-employed had to wait until the end of May for the first payment, two months after the lockdown was first introduced. The government set up the system remarkably quickly. Now the payment mechanism is in place, why make people wait another three months? People's personal expenses are on a monthly basis Mortgages may be deferred in many cases, at least for now, but many rents are still payable monthly. Not to mention the day-to-day expense of food, essentials and other commitments (plus the business commitments mentioned above). Why not make SEISS payments monthly?
- The CJRS (furlough) support is not reducing from 80% to 70% until August. Why effectively reduce SEISS from June, two months earlier?
- There is no grant available to the self-employed trading as a limited company. They need to rely on Universal Credit for cash. That is a separate problem. Much more difficult to solve, unless we talk about some form of Universal Basic Income."
- There was also fifth problem for those who have had a mix of part-time employment and part-time being self-employed. Where the latter was less than 50% of income assessed over the three years, they were were not eligible for any SEISS support. Yes, it does happen, as is the case within my family.
Since then, none of these issues have been addressed. Specifically:
- The Chancellor did not amend this SEISS so it was paid monthly, nor keep it at 80% for June and July.
- There is as yet no indication that the SEISS will be extended again if the coronavirus crisis persists, such as if there is a second or subsequent lockdown. For many in the entertainment industry, their activity and income will be diminished or even zero for at least the remainder of the year. Other people too.
- It sets out that “The Government's own press release from 26 March 2020 stated: "The income support scheme... will cover the three months to May," ie, March, April and May. Logic (and basic counting) therefore suggests the second three-month grant covers June, July and August.”"
- However they checked this with HMRC, who advised “apparently the grants don't relate to a specific three-month time period, they are just grants – though based on three months of trading profits.”
- "So the rules are 'simple'. The first grant is for those whose 'business was impacted by Covid-19 before 13 July', and the second is for those 'impacted by Covid-19 on or after 14 July'. If impacted before and after the dates, you are due both."
There is as yet no indication there will be any extention and further payments under the SEISS. Unless there is some change to that, this second grant is the last. We self-employed are on our own now, resorting to Universal Credit if needs must.
In doing so it can be worth delaying making the claim if you are already claiming Universal Credit, as explained here.
This website also provides a lot of other advice, including if you missed the first grant.
HMRC LINKS
If you know you are eligible, and can confirm your business has been adversely affected by coronavirus (COVID-19) at any time since 14 July, here's the link to make your claim
If you haven't received an email from HMRC, and are not sure if you can make a claim, you can check here
IN CONCLUSION
Both the furlough and SEISS schemes are being wound down, despite infection rates remaining too high, and the economy taking an extreme battering. The virus is going to be with us to some extent for the foreseeable future.
It's a rocky road ahead for the country, and everyone in it. The self-employed in particular. Let's hope further support will be forthcoming for those who need it, such as in the entertainment industry.
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