Announcement of a Second lump sum for self-employed

The Chancellor has announced a second and final grant under the Self-employment Income Support Scheme (SEISS).

The grant will be based on 70% of earnings for three months (June to August) capped at £6,570 with applications due to open in August.

HMRC has confirmed the same eligibility criteria will be used to establish entitlement to the further SEISS grant. We remind you that self-employed individuals, including members of partnerships, are eligible if they:

• submitted their Income Tax Self-Assessment tax return for the tax year 2018-19 by 23 April
• continued to trade in 2019-20 and intend to keep trading in 2020-21
• carry on a trade which has been adversely affected by COVID-19
• have average self-employed trading profits of no more than £50,000 and at least equal to their non-trading income.

The government has not moved to extend the scheme to those who were not eligible for the first payment, however an individual does not need to have claimed the first grant to be eligible for this second and final payment. Those claiming both the first and the second grant have to confirm that they meet the eligibility criteria, in particular that their business has been adversely affected by coronavirus. 

HMRC’s guidance indicates that this includes being unable to work because the taxpayer is shielding, self-isolating or is on sick leave or has care responsibilities because of coronavirus. It also includes scaling down or temporarily stopping trading because the supply chain has been interrupted, the business has fewer or no customers or staff are unable to work.

UPDATE 13/06/2020: On 12 June HMRC published examples to show when the “adversely affected” criteria for the first and second SEISS grants will be met. It confirms that those who are self-employed and able to return to work as normal in June will not be eligible for a second grant, although they can claim a grant for the first period.