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If you are self-employed, you will be familiar with the government’s SEISS scheme. Introduced to help people struggling because of the coronavirus pandemic, the Self-Employment Income Support Scheme has recently been extended to cover the period from November 2020 to April 2021. However, even if you claimed the first two grants, you need to know about important SEISS eligibility changes. The rules for claiming are now tighter, so you need to be aware of them before you make a claim.

What were the original SEISS rules?

The first two SEISS grants paid out 80% and 70& of your average monthly trading profits (subject to a cap).

To qualify, you had to declare that your business had been ‘adversely affected’ by the coronavirus pandemic.

For the first two grants, the government said that your business would be ‘adversely affected’ if:

  • you’re unable to work because you:
    • are shielding or self-isolating
    • are on sick leave because of coronavirus
    • have caring responsibilities because of coronavirus
  • you’ve had to scale down, temporarily stop trading or incurred additional costs because:
    • your supply chain has been interrupted
    • you have fewer or no customers or clients
    • your staff are unable to come in to work
    • one or more of your contracts have been cancelled
    • you had to buy protective equipment so you could trade following social distancing rules

These rules were open to quite a lot of different interpretations. For example, if there was a period in which you couldn’t work because you were self-isolating, you could claim even if your overall profits were unaffected.

Similarly, if you had to pay out for PPE to keep trading, but you still made as much profit as normal, you could claim.

In scenarios like these, you may not be able to claim SEISS grants 2 and 3.

What are the SEISS eligibility changes?

The third SEISS grant will now cover 40% of your average monthly trading profits (subject to a cap). This is up from the 20% originally announced.

SEISS eligibility changes now mean that, to claim the third and fourth grants, you must:

  1. Have been previously eligible for grants 1 & 2 (whether you claimed or not)
  2. Declare that you intend to continue trading AND either:
    1. You are impacted by reduced demand due to COVID-19
    2. You are temporarily unable to trade because of coronavirus

In short, unless you can prove that you are experiencing reduced demand – or that you are temporarily unable to trade – you should not claim grants 3 & 4.

Going back to our earlier examples, if your profits are as high (or higher) than normal, you won’t be able to claim simply because you’ve had to buy extra PPE.

On the other hand, if you have to self-isolate, you can claim if this means you are temporarily unable to trade. A good example would be a tradesperson like a plumber or decorator who was unable to work from home.

However, if you have to self-isolate (and are not ill), but you can still work from home, then you can’t claim. An example would be a self-employed marketer who could still service their clients while self-isolating.

I’m still unsure whether I’m eligible for SEISS

While the new rules are tighter, there will inevitably some situations in which it’s hard to determine whether you are eligible. If you have any doubts, the best plan is to contact HMRC direct. If you are a THP client, you’re also welcome to talk to your account manager. One thing’s for certain, though – if you claim wrongly, there’s a good chance the taxman will try and claw the grant back at a later date. So make sure you are eligible first!

Avatar for Jon Pryse-Jones
About Jon Pryse-Jones

Since joining THP in 1978, Jon Pryse-Jones has been hands on with every area of the business. Now specialising in strategy, business planning, and marketing, Jon remains at the forefront of the growth and development at THP.

An ideas man, Jon enjoys getting the most out of all situations, “I act as a catalyst for creative people and encourage them to think outside the box,” he says, “and I’m not afraid of being confrontational. It often leads to a better result for THP and its clients.”

Jon’s appreciation for THP extends to his fellow team members and the board.  “They really know how to run a successful business,” he says.  He’s keen on IT and systems development as critical to success, and he continues to guide THP to be at the cutting edge and effective.

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