HM Revenue & Customs have slightly changed the requirements for claiming the third tranche of the SEISS compared to the previous two tranches – but the result may have a major impact on the self employed’s ability to claim the SEISS.
When claiming the first two SEISS grants the self-employed individual had to confirm that their trade had been “adversely affected” by the coronavirus. This condition has been replaced with a more precise “impact on demand” test.
Now the self employed must confirm that:
- currently trading and are “impacted by reduced demand”; or
- have been trading but are temporarily closed due to coronavirus
- intending to continue to trade; and
- reasonably believe that the impact on their business will cause a significant reduction in their trading profits due to reduced business activity, capacity or demand, or inability to trade due to coronavirus during the period 1 November to 29 January 2021.
The reduced demand test means the level of sales for the current accounting period (taxed in 2020/21) must have reduced, or the capacity for sales must have reduced due to fewer customers, fewer contracts, or disruptions in the supply chain.
For the first two tranches the “adversely affected” test was met if the business turnover had remained constant or increased but business costs had increased due to coronavirus, leading to a reduction in profits; now it is turnover that is being targeted.
HM Revenue & Customs is making clear that they will be reviewing claims to SEISS and checking their validity, so if you are in any doubt as to whether you will meet the new requirements, it is important that you discuss the matter with your usual Robson Laidler contact.