Who is eligible for the fourth grant?
In the March budget, the Chancellor announced an extension of the SEISS grants. With the exception of those who filed tax returns for 2019/20, “all other eligibility criteria remain the same as for the third grant”.
This implies that your business must continue to be affected by coronavirus AND you must believe that you are getting a “significant reduction” in profits for one of two reasons, either because of “reduced demand, activity or capacity” or because you cannot Trade.
In practice this means the following:
1. Your company must continue to be affected by Covid during the claim period or be newly affected during this time
- Your company must be exposed to an ongoing coronavirus attack from February 1 to April 30 or be newly affected during this period. So you cannot apply if, for example, your company had problems in August, September and October but is no longer affected.
- Even if your business has seen a massive boom over the past year, you will not qualify unless you can demonstrate it made an impact during the eligibility period. If you have not previously been affected but have been affected again during this period, you are entitled regardless of your previous circumstances.
2. You must assume that the effects will result in a “significant decrease” in trading profits over this period
- Before making a claim, you must determine whether the impact on your business will “significantly reduce” your trading profits.
- For many, this will be straightforward, but others may not be sure yet. If you are, you may have to wait until you have a “reasonable conviction” that your trading profits will be significantly reduced before knowing if you can make a claim.
- Only you can decide what a “significant reduction” in your trading profits is – it depends very much on your business. HMRC says it “cannot make this decision for you because your individual and general business circumstances must be considered in determining whether the reduction is significant”.
- You need to keep evidence showing how coronavirus has affected your business, resulting in less business than usual.
- Don’t worry if your business recovers after your use. Your eligibility will not be affected as it is based on your “reasonable belief” that your trading profits would have decreased significantly at the time you were called.
- While increased costs weigh on your bottom line, you won’t be able to claim if you have just had an increased cost and no other impact, e.g. For example, if you had to buy face masks and cleansers, but your demand was not affected. Not sure you can make a claim? Below are some real-world scenarios.
3. This “significant decrease” must be due to “decreased demand, activity or capacity” or temporarily unable to trade
To show that “reduced demand, activity or capacity” affects you, you must be able to demonstrate:
- You have fewer clients or clients than normal, resulting in decreased activity due to social distancing or government restrictions.
- You have one or more contracts that have been canceled and not replaced.
- You’ve done less work due to supply chain disruptions.
To show that you temporarily couldn’t trade, you need to prove that:
- Your company had to close due to government restrictions.
- You have been instructed to screen or self-isolate according to NHS guidelines and cannot work from home (if you have been abroad and need to self-isolate, it doesn’t count).
- You have tested positive for coronavirus and are unable to work.
- You cannot work because of parental care, e.g. B. due to the closure of schools or childcare facilities.