Last updated: 25 Nov 2020 11:22 Posted in: Partners
If your clients are self-employed, the latest U-turn in government policy could well benefit them. Instead of ending on the 1st October 2020, the Self-Employment Income Support Scheme (SEISS) has been extended to April 2021.
This extension is taking the form of two grants: one covering the period between November 2020 to January 2021, and the other from February 2021 to April 2021. By extending the support, the government is acknowledging the contribution that the self-employed and sole traders make to the UK economy and how important it is to keep them afloat.
So, to help your clients get the most out of SEISS and ensure the success of their business, we’ve asked Mike Parkes from AIA strategic partner, GoSimpleTax to explain the extension and how you can help your clients claim it.
What is the SEISS?
As you will be fully aware the SEISS is a series of taxable government grants for self-employed individuals. It was set up to support self-employed workers whose earnings have been adversely affected by COVID-19.
The scheme opened to applications of its first grant on the 13th May 2020. Successful applicants could get either £7,500 or 80% of their average monthly profits over the 2016/17, 2017/18 and 2018/19 tax years (whichever was the lower amount). The second phase involved a grant worth 70% of average monthly trading profits. It was paid out in a single instalment covering three months’ worth of profits, and capped at £6,750.
What’s the value of the latest grant?
The third one (1st November 2020 to 31st January 2021) offers 80% of three months’ average monthly profits up to a total of £7,500. This is the same value as the first grant.
How will clients know if they are eligible?
The majority of the terms to the latest grant are the same as the first two. However, there’s one new requirement regarding reduced demand.
To make your clients application easier, I’ve listed each one below:
Remember, your clients are still able to apply even if they didn’t apply for the previous two grants. Likewise, your clients may keep working after claiming the grant. You and your clients just need to prove that they were impacted by reduced demand during the pandemic.
How do my clients claim?
It’s simple, all your clients need to do is visit the official government claims portal. Applications for the third grant open on the 30th November, but it is possible to create a Government Gateway account in the meantime. This will streamline the process when applications open.
This grant is arguably the best opportunity for sole traders to keep their businesses going through the uncertain times ahead. It’s unclear if the fourth grant will be as generous, especially if lockdown has eased by the time applications open.
Please note that these grants are subject to tax and national insurance and need to be included as part of the self-employed income on your clients 2020/21 tax return.
About GoSimpleTax
GoSimpleTax is a secure cloud-based solution and it is officially- recognised by HMRC.
It includes partnership, non-resident and previous year returns. it has an easy to use interface and submits direct HMRC. GoSimpleTax are ready for MTD and the software shows the tax liability in real time. It has a simple dashboard allowing you to switch between clients easily.
AIA members receive a 25% discount on GoSimpleTax to receive your discount code sign-up here www.gosimpletax.com/tax-aia.