Self Employed Income Support Scheme – Has my business been adversely affected?

First published on 07 July 2020 by Alastair
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Although the deadline for claiming the initial grant payment under the SEISS is Monday 13 July, there are still many self-employed individuals that have not completed their claim as they are not sure if they are actually eligible.

In order to be eligible, an individual’s business must have been adversely affected by coronavirus, and HMRC have provided the following examples of what this might look like:

You’re unable to work because you:

  • are shielding
  • are self-isolating
  • are on sick leave because of coronavirus
  • have caring responsibilities because of coronavirus

You’ve had to scale down, temporarily stop trading or incurred additional costs because:

  • your supply chain has been interrupted
  • you have fewer or no customers or clients
  • your staff are unable to come in to work
  • one or more of your contracts have been cancelled
  • you had to buy protective equipment so you could trade following social distancing rules

Although these examples cover off a wide range of scenarios, there are still some left wondering if they fit the criteria.

For example, what about businesses that have not lost any clients but are seeing a reduction in their work as clients cannot afford (or don’t want to prioritise) their services at this time.  A business in this situation is clearly being impacted by the pandemic but does not fall under the examples above.  Similarly, what about businesses that only had to cease trading for a very short period of time (for example to set up for home working) and then were able to resume working as normal.  Are they eligible?

The answers to the first of these questions seems to be in the scenarios offered by HMRC to give further guidance: which you can find here.  These scenarios use the phrase “able to work as normal”, which makes clear to us that HMRC will accept any business that has not traded at its usual level (due to specific COVID-19 measures, or a general downturn in their industry due to the financial difficulties we are all facing) as being adversely affected and therefore eligible for the grant (provided they meet the other criteria).

For businesses that have had a short closure, it comes down to whether this closure had an impact on their business.  If it simple ceased trading for a couple of days to set up for working from home, and were then able to catch up with their work, then it is difficult to argue that the business has been adversely impacted (unless there were additional costs incurred relating to setting up home working).  However, where sales have been lost (and could not be recovered) it is not dishonest to say that the business has been adversely impacted.  Ultimately, for many in this situation it will come down to a moral decision, on if they feel comfortable that the impact their business suffered was enough to justify (to themselves) claiming a grant worth almost 3 months of profits.

For businesses still looking to make their initial grant claim, this can be done here. 

Chris Leslie, Tax Senior

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