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A bit like the 3rd Godfather film, the 3rd SEISS grant claim needs to be approached with the attitude that if you don’t pay attention to the detail, you might find that it doesn’t quite live up to its predecessors and that in the end there’s a good chance you won’t get it.
The portal for the 3rd SEISS grant opens for claims on Monday 30th November.
Guidance has been published which taxpayers need to consider carefully before claiming as there are significant changes from the 1st and 2nd grant.
In making these changes, HMRC has quite drastically altered the conditions needed when claiming the first and second grants.
It gives clear indication that HMRC will be looking at 2020/21 tax returns and comparing them to previous tax years to ensure that the 3rd grant has been legitimately claimed.
In order to qualify, businesses need to not only be adversely affected due to COVID but also:
An additional test has been added in which the taxpayer must:
Some examples of the terminology are included in the footnotes below.
HMRC are therefore expecting applicants to make “an honest assessment” about whether they reasonably believe their business will have a significant reduction in profits.
The 3rd grant is calculated in the same way as the 1st and 2nd grants (i.e. based on the same tax years and the £50k income cap and 50% of income tests all apply, as before) so all taxpayers previously excluded will continue to be excluded.
The grant payable is the lower of:
The claim deadline is 29 January 2021, so if you are currently unsure if the next few months will see a downturn, but then by January realise that this is the case, you still have time to access the support.
The 3rd grant, as with the 1st and 2nd, is subject to tax and national insurance.
The grant can only be claimed by the taxpayer and not by their accountant/advisor.
The 4th grant will cover the period February to April 2021.
The Government will review the level of the 4th grant and provide details in due course.
This might include where you:
You must not claim if the only impact on your business is increased costs. For example, if you have had to purchase face masks and cleaning supplies. This would not be considered as reduced demand.
HMRC have given a number of examples of reduced demand: How your trading conditions affect your eligibility for the SEISS.
If you are currently trading but have reduced demand due to Coronavirus you must keep evidence to support this fact at the time of your claim. Examples may include:
If your business is temporarily unable to trade due to Coronavirus, you must keep evidence, such as:
If you had to close before 1 November 2020 and continued to be closed for a period of time up to 29 January 2021, you can still claim as long as you are eligible.
HMRC have given a number of examples of being unable to trade: How your trading conditions affect your eligibility for the SEISS.
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