While life is returning to some semblance of ‘normality’ business owners may still be struggling and require business financial support.
For the self-employed, clients may have been forced to close their business. As a result, you may have gaps in your income. The fifth Self-Employment Income Scheme (SEISS) grant is now available for those eligible. But there are changes to how it works.
Furlough (or Coronavirus Job Retention Scheme) has helped many firms during difficult times. While it is continuing, the rules changed this week.
Covid business financial support
Self-employed people can apply for a fifth and final Self-Employment Income Support Scheme (SEISS) grant. HMRC maybe contacting you but as with previous grants, they are staggering claim dates.
It is different to previous grants as you you need to compare two different turnover figures: one for the 2020/2021 tax year and one from the previous tax year. This will determine whether your turnover has fallen by 30% or less.
To be eligible, you must be:
- Self-employed or a member of a partnership.
- Traded in the tax years 2019/2020.
- Submitted your tax return on or before March 2, 2021.
- You must also either be currently trading but impacted by reduced demand due to Covid-19, or have been trading but are temporarily unable to do so due to the pandemic.
HMRC will look at your 2019-20 self assessment return and as long as your trading profits are less than £50,000. Your grant will be calculated accordingly and money deposited in your account within seven working days.
The amount of the fifth grant will be determined by how much your turnover has been reduced in the year April 2020 to April 2021.
If your turnover was reduced by 30% or more, you will receive 80 per cent of three months’ average trading profits, to a maximum value of £7,500.
If the reduction was less than 30%, you will receive 30% of three months’ average trading profits, to a maximum value of £2,850.
You can apply for the grant through the government website and you’ll need your Unique Taxpayer Reference (UTR), National Insurance number, Government Gateway user ID and password and your bank details.
The furlough scheme has assisted millions throughout the pandemic. The support scheme was designed to ensure workers were able to stay in employment during challenging times. It was extended to offer further support following further lockdowns.
But as Britain reopens and returns to normality, the scheme will be phased out.
The first major change took place on 1st July, but there is an additional change this week which truly signals the beginning of the end of the scheme.
Originally, government support was set at 80% of a person’s wages up to £2,500 per month. However, from 1st August onwards there will only be 60% support available.
This will be up to a maximum cap of £1,875 for the hours the employee is on furlough.
This means employers will have to pay 20% of wages up to £625 per month.
They will also need to pay employer’s National Insurance contributions and pension contributions.
Employers can choose to top up a person’s wages above the £2,500 cap set by the Government. The same rules are in place for September, until the scheme finishes completely.