Further to my recent article, the Government have announced in the last couple of days, significant changes to the criteria that needs to be met in order for those who are eligible to claim the third SEISS grant, along with some additional details.
When can I claim?
As you are already aware, the claims portal opens from next week, Monday 30 November, and you will be able to apply on a staged basis, like the previous grants.
You may have already received an email from HMRC informing you of this date and also the changes to the criteria for this grant. It is expected that they will send an addition email with details of the exact date that you are able to claim from.
This portal will be open until 29 January 2021 so claims must be submitted by this deadline.
What are the additional criteria points that I need to meet to claim the third grant?
The initial eligibility criteria remains the same as the first and second grants, but unlike these previous grants, further factors need to be considered when making your claim, in addition to assessing if your business has been adversely affected by Coronavirus.
You must currently be trading or would have been if it wasn’t for government restrictions such as lockdown, and also intend to continue to trade after the pandemic.
Your trade must also have suffered as a result of Covid-19, by either reduced activity, capacity or demand in the period 1 November 2020 to 29 January 2021.
You must reasonably believe you will suffer a significant reduction in trading profits in the basis period in which this 3 month period is included. E.g. if you have a March year end, you will need to look at the projected results for the year ended 31 March 2021.
What is meant by reduced activity, capacity or demand?
This could mean a range of factors and a few examples include –
- you are trading but you have fewer customers or clients
- you have had contracts cancelled and not replaced
- you have been carrying out less work due to supply chain issues
- you are self isolating or shielding as a result of following NHS guidelines
- you have had parental caring responsibilities due to a school closure.
This must also be a new or continuing impact of Covid-19.
HMRC have listed some examples of different situations on their website for reference.
I have incurred additional costs to ensure I am Covid secure for my staff or customers, does this mean I can claim?
Unfortunately, unlike the previous grants, this reason alone does not mean you can claim as you must have suffered a reduction in trade.
I have been unable to work as have been self isolating following my recent return to the UK from abroad, can I still claim?
HMRC have specifically said that will not be able to claim if the only reason you cannot work is because you are self isolating as a result of coming back to the UK.
I’m unsure of what will happen between now and the end of my accounting period, so how will I know if I can claim?
As mentioned above, you must reasonably believe your overall profits for the accounting period which covers November 2020 to January 2021 will be significantly reduced.
You will need to make an honest assessment of what you feel the position will be and use this to determine if you should make a claim for the third grant. At the end of your accounts period, if your actual results are more favourable then you expected, you do not need to apply hindsight or repay the grant as long as you sensibly considered all factors when looking at your projected position at the time of claiming.
HMRC have recommended that, if you aren’t sure how your accounts will be affected at the moment, you may want to wait until closer to the deadline to make your claim. However please be aware that all claims must be made by 29 January 2021.
This is quite a complicated area to assess and predict so if you do have any queries, then please do not hesitate to contact us and we can try to assist you.
Do my trading profits need to be reduced by a certain amount in order to claim?
HMRC have said that they need to be significantly reduced but have not put a specific value on this. They have asked the taxpayer to make an honest assessment of the situation at the time of making the claim.
When looking at the impact, you should also look at what you would have expected trade to be like if the pandemic hadn’t occurred, and not just the results from this time last year, as this may not be a fair comparison, for example if you had opened a new shop.
Do I need to keep any evidence to support my claim?
Yes, you do need to keep adequate evidence to support you claim and demonstrate you either incurred reduced demand or were temporarily unable to trade.
Examples of the evidence you should keep could include –
- business accounts showing reduced activity compared to previous years
- records of reduced or cancelled contracts/appointments or fewer invoices
- record of dates you had reduced demand or capacity or when you were required to close due to government restrictions
- NHS Track and Trace communications if you were instructed to self isolate (excluding if you’ve been abroad as mentioned above) or an NHS letter asking you to shield
- test results if you’ve been diagnosed with coronavirus
- letters or emails from your child’s school if you had parental responsibilities.
As with all grants you should always keep details of the amount of grant claimed and the claim reference. These details will also be needed when preparing your 2020/21 tax return.
Do I need to provide any evidence when I submit my claim?
No, you will claim the grant in the usual way using your Government Gateway account but will be required to make a further declaration that you meet the new criteria.
Evidence needs to be retained in case it is required in the future to support any claim previously made.
If you do have any queries regarding any of the above, then please do not hesitate to get in touch with your usual contact at Albert Goodman.