From Monday, August 17, some 3.5 million eligible self-employed people in the UK will be able to claim £6,750 under the second grant of the Self-Employment Income Support Scheme (SEISS).
The initiative was introduced by Chancellor Rishi Sunak in April to provide financial support for self-employed workers affected by the coronavirus pandemic during March, April and May 2020.
The first SEISS grant was worth 80 per cent of monthly trading profits for three months (2017-2019), capped at £7,500.
Applications closed on July 13 with only 2.6 million people out of a possible 3.5 million across the UK making a claim for the first SEISS grant.
The second grant is payable if the business has been affected after July 14.
While the reduction in value of the second grant has been widely reported - it will be 70 per cent of income, as opposed to 80 per cent for the first grant, the impact of the change in the way this is calculated is a cause for concern, claims Tommy McNally of Tommy’s Tax.
Tommy’s Tax is a website and app that calculates overpaid tax and claims the refund on your behalf.
Tommy is also helping people who have been made redundant this year as a result of the Covid-19 crisis to claim overpaid tax back (as tax assumes the same income over the entire year) - on average he’s securing a rebate of £2.5k.
Tommy explains: “I’m alarmed that everyone appears to be dismissing the change as insignificant. This is rubbish, the calculation will have a huge impact on eligibility.
“The second grant is still very generous, as it’s only 10 per cent less than the first grant and it's still a payment for three months’ worth of income.
“However, the time period misses any impact in June and the first half of July. This will mean that some who were badly impacted in June and early July, but recovered by 14th July, won’t be eligible.”
This concern was also raised by money-saving expert, Martin Lewis, who called it “bizarre” soon after details of the second grant were released in June.
At the time, Martin wrote in his weekly MoneySavingExpert.com newsletter : “Disappointingly for many excluded from the first grant, this has the same eligibility criteria, so if you were ineligible for that, you are ineligible for this.
“As the Govt's own press release from 26 Mar stated: ‘The income support scheme... will cover the three months to May,’ ie, Mar, Apr and May. Logic (and basic counting) therefore suggests the second 3mth grant covers Jun, Jul and Aug.
“So it's very strange to read the new rule that says you have to declare your business was impacted after mid-July, and unfair on businesses heavily impacted in June and recovered by then.”
The financial journalist raised his concerns on his TV show and spoke directly to HMRC, telling newsletter subscribers: “Apparently the grants don't [now?] relate to a specific three month time period, they are just grants [though based on three months of trading profits].”
Martin explained how the SEISS rules are simple - the first grant is for those whose “business was impacted by Covid-19 before 13 July” and the second, which comes on August 17, for those “impacted by Covid-19 on or after 14 July” - if you have been impacted before and after those dates, you should apply.
What counts as being impacted by Covid-19?
Martin says it's obvious things such as:
you or your staff have been unable to work due to it
you can't access your usual place of work
your revenue has been negatively impacted
And it's simple - either there's been an impact, even a small one, in which case you're due the whole grant, or there hasn't.
If you didn’t apply for the first grant as you were worried, but now realise you are eligible, use the HMRC eligibility checker here and remember, you can make a claim if you're still working.
