SEISS grants extension explained
With the new lockdown imposition, the government has announced extensions to the self-employed income support scheme (SEISS). This is in the form of two more grants, which are available to apply for.
Similar to the job retention scheme, the government is paying up to 80% of self-employed peoples’ profits. The total grant is based on the trader’s mean profits over the past three tax years, up until 2018/19.
However, those who:
– Make more than £50,000 per years
– Who’s income from self-employed activities is less than half their overall income
Are not eligible for the grants.
On the 5th of November, Rishi Sunak announced that the next grant would be raised to 80% of profits. This was an increase from previously announced 20%, 40% and 55%.The amount available to claim for the period is capped at £7500, and at £2500 per month, and the applications will open on November 30th 2020.
To get these grants you must
- Be eligible for the previous SEISS grants (even if you didn’t benefit from them)
- Still be in business
- If you are not actively trading, you must intend to resume before April 2021
- Your business has lost work due to the covid-19 lockdowns since 1/11/20
What if it isn’t enough?
Some people may find that the grant does not cover all of their life expenses. In this case, applications to Universal Credit are allowed, and the money can be received along with the SEISS grants. However, it can take up to 6 weeks for the UC to arrive.
Minimum Income Floor, or MIF, is equivalent to the national minimum wage at 35 hours per week. Self-employed individuals are assumed automatically to make profits at least equalling the MIF. This has impact on how much they are allowed to claim and can make it harder to get the money.
However, the good news is that MIF does not apply in the first 12 months of your self-employed trade. Moreover, the government has suspended it until 30/04/21. This means that individuals applying for UC will be less likely to have their earnings reduced by MIF.