COVID-19 Update – 18 August – Second SEISS grant and employment allowance and CJRS.

Self-employed Income Support Scheme (SEISS)

Self-employed workers can now apply for the second grant through the Self-employed Income Support Scheme. Those who are eligible for the grant will be able to claim 70% of 3 months trading profits up to a maximum of £6750. Any grant you receive will be paid directly into your bank account within 6 working days of completing the claim.

To be eligible for the grant you will need to have submitted a self-assessment tax return for the tax year 18/19, have completed self-employed within the tax year19/20, and be planning to continue doing self-employed within the tax year 20/21. You will also need to confirm your business has been adversely affected by COVID-19, have at least 50% of your income from self-employment, and have an average trading profit of no more than £50k.

If you believe you are eligible you can apply for the grant via the Government claims portal here. Applications can only be made by the claimant and are open until 19 October 2020.

Please note the grants are subject to income tax and self-employment national insurance contributions and will need declaring in the 20/21 self-assessment tax return.

Employment Allowance and CJRS

HMRC have confirmed employers can save their Employment Allowance to use when the CJRS grant ends.

It has always been clear that employers should not be claiming for any NIC under the CJRS where employment allowance covers all of the employer’s secondary class 1 NIC liability for the year so that no secondary class 1 NIC is due for the year. However, there was confusion about what happens when the EA does not cover all the employer’s second class 1 NIC liability for the year.

HMRC has cleared up this confusion by stating that employers are able to wait and claim the EA later in the year. Employers are able to claim the EA (late) for liabilities which are under £4k. However, you will need to take extra care to ensure you are not receiving relief for the same NIC liabilities twice.

Please note it is very important to make sure the EA is not set against the employer’s NIC that has been claimed under the CJRS.

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