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Treasury gives legal effect to SEISS

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The Treasury has published a direction under Coronavirus Act 2020 s 71 and s 76, setting out the legal framework for the operation of the self-employment income support scheme (SEISS) and which has effect for the duration of the scheme.

HMRC’s SEISS guidance originally provided that the scheme would allow claims for a taxable grant of 80% of trading profits, up to a maximum of £2,500 a month covering a period of three months (subject to extension). The direction sets this out rather differently as the lower of £7,500 and 80% of three months’ worth of average trading profits, meaning that any potential future extension will require a revision to the maximum amount that can be claimed.

The direction defines ‘trading profits’ as ‘the amount of the trading income component of total income at step 1 of s 23 of ITA 2007 (the calculation of income tax liability) for that year’ (less any trading losses in that year).

The direction also defines the purpose of the scheme, qualifying claims and qualifying persons by reference to businesses which have been ‘adversely affected’ by the coronavirus pandemic. The direction does not include any definition of ‘adversely affected’, although HMRC’s guidance has been updated to provide the following examples of adversely affected businesses:

  • individuals are unable to work because of shielding, self-isolating, being on sick leave or caring responsibilities due to coronavirus;
  • businesses have had to scale down or temporarily stop trading because of supply chain interruptions, reduction in customers or due to staff being unable to come in to work.

The guidance also notes that claimants must keep records of the amount claimed, the claim reference number and evidence that the business has been adversely affected.

The direction provides that no claim can be made if it is ‘abusive or is otherwise contrary to the exceptional purpose of SEISS’. 

Issue: 1486
Categories: News