SEISS Grant 3 available – but you might want to wait

Last Updated on 30 November 2020

The third coronavirus support grant for sole traders is available from today (30 November 2020) until 29 January 2021.
See full details on: gov.uk >

sole trader

This grant covers three months and, like grant 1, is based on 80% of average monthly profits calculated on sole trader profits between 2016 and 2019.

Much has been made of the fact that the eligibility criteria haven’t changed. If you were helped by the first two grants you’re probably eligible for this one too. Cold comfort for all those who’ve had no support since March.

And just to state the obvious, none of the SEISS grants support single directors of limited companies. In government-speak, directors of limited companies do not fall within the definition of a ‘sole trader’.

Less well publicised has been the addition of further restrictions. These take the form of declarations and predictions that a sole trader now has to make.

These new restrictions fall into two main areas:

  1. Will your business be experiencing “reduced demand” between November and January?
    This is a tightening of the eligibility. Last time you just had to declare that you were “adversely affected”.

    The precise wording includes “reasonable belief” and “significant reduction”.
  1. You have to look at what will happen to your business between 1st November and 29th January, and decide if it will significantly reduce your profits for the whole of this tax year.

Taken together these extra restrictions mean a certain amount of crystal ball gazing for sole traders.

Gov.uk includes some examples which might help you make a decision, but of course none of the examples includes production freelancers.

The effect of these will be to put people off claiming, or to delay claiming until January, when the situation might be clearer.

So what does this mean for sole traders in the creative industries?

Some thoughts:

  • If in doubt whether you’re going to be adversely effected between 1 November and 29 January, wait until January to claim.
    But don’t miss the deadline of 29 January. Put it in your diary now!
  • Keep records to back up your claim. Gov.uk has a list of things which count as records.

I can imagine some production freelancers being in a bit of a quandary over all this. Winter is often a time when bookings go down. The question will be, have they gone down more than normal.

Crucially you have to show that the reduced demand is because of coronavirus, not just normally seasonal dips.

What a year. Roll on 2021.

Posted on 30 November 2020

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