Making claims, and 2020/1 extension to scheme

Making Claims and Miscellaneous (Including 2020/1 Extension To Scheme)

You cannot apply until HMRC contacts you. If you are eligible, HMRC will tell you when you can make your claim. It advised that its online service for applications is available from 13 May 2020. Once your claim has been approved by HMRC, it will make payment within 6 working days.

SEISS will be paid to you as a single sum for March-May 2020, not monthly instalments. Payments have been available from mid-May 2020. The latest that an application can be made is 13 July 2020. In the interim you can apply for Universal Credit if you are eligible.

For the period June-August 2020, there will also be a single sum, not monthly instalments. Applications can be made in August 2020 for that period. You need not have claimed for the first three month period in order to claim for the second three month period. The latest that an application can be made is 19 October 2020.

SEISS grant payments received must be treated as income and added to other income for tax purposes. In other words, it is taxable income and you have to show the payments on your tax return.

For the period covered by the scheme March to August 2020, you must be trading when you apply under SEISS or would be except for Covid-19 preventing it. For the extension period beginning November 2020 however, you must be trading - see the paragraph about the extension below.

For the period March to August 2020, you do not have to prove that you have been adversely impacted by Covid-19 nor do you have to prove the amount of loss suffered in order to make a claim, but HMRC will introduce checks to prevent fraud. (The "adverse effect" criterion will, in relation to the period November 2020 onwards, instead be "impacted by reduced demand due to Covid-19" - see the paragraph below about the extension period.)

If you receive SEISS grant payments for the March to August 2020 period you can continue to work, start a new trade or take on other employment including voluntary work. (For November 2020 onwards, you must be trading - see paragraph below about the November 2020 to April 2021 extension period.)

If you operate your business through a company, SEISS will not apply, but you can, as an employee of your company, make a claim under the Coronavirus Job Retention Scheme.

Further extension (Nov 2020 - Apr 2021) to the Self-Employed Income Support Scheme

The SEISS scheme originally covered the period 1 March to 31 August 2020. On 7 October 2020 H M Government updated its Policy Paper on the extension of SEISS.

The Paper set out only basic information about the extension, but H M Government made an announcement about it on 22 October 2020 and has since then made further details about the extension available. 

The extension will provide two grants and will last for six months, from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a three-month period.

The first grant will cover the three-month period from 1 November 2020 until 31 January 2021. The Chancellor announced on 22 October 2020 that this would cover 40 per cent of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £3,750 in total. Subsequently, the Chancellor announced, following the Government's decision to impose a national lockdown from 5 November, that the same limits as under original scheme would be operated, so that instead of the proposed 40% with a £3,750 limit, the limits from 1 November would be 80% with a £7,500 limit.

The second grant will cover the three-month period from 1 February to 30 April 2021. The Chancellor will in due course announce the limits on the second grant.

In order to qualify for these extension rounds of the SEISS, you must meet the same conditions as for the earlier rounds of the scheme (i.e. the grants for March to May 2020 and June to August 2020). To be eligible for the further grants, you must be eligible for a previous round of SEISS (but you do not actually have to have made a claim under either of the two earlier rounds of SEISS).

However, there are two new, additional, conditions which will have to be met for each of the further two extension grant periods:

(1) you must be actively trading at the time you claim the grant and you must intend to continue to trade; and

(2) you must be “impacted by reduced demand due to COVID-19” in the "relevant period". (For a previous round of the SEISS grant, your business had to be “adversely affected”. The expression “impacted by reduced demand” is likely to be defined more narrowly than “adversely affected”.

The "relevant period" for the purpose of "(2)" above in relation to the initial extension grant is 1 November 2020 to the date of claim and the "relevant period" in relation to the further extension grant is expected to be 1 February 2021 to the date of that claim.

Claims can be made from 30 November.

The requirements to be “actively trading” and to be “impacted by reduced demand” are new and we expect HMRC to publish further guidance to clarify the meaning of these terms.

The requirement to be actively trading will mean that businesses that have had to close during the pandemic will not be able to claim if they have not restarted during the relevant period. For the previous grant rounds, you could make a claim where you had temporarily ceased to trade due to the Covid-19.

H M Government is understood to have made this change for 1 November onwards to ensure that only viable businesses are supported and to align the scheme with the Job Support Scheme which will require employees to be working at least a third of their usual hours.

The 1 November 2020 – 30 April 2021 grants will be based on the same tax years as the previous grants, which means information on 2019/20 self-assessment tax returns that have been filed will not be considered.

We will update this page when further information becomes available.