SEIS - Round 2
HMRC updated its guidance on the Self Employed Income Scheme (SEIS) grant round 2 on 12th June 2020. We try to summairse the key points here for all Locum Optometrists and Dispensing Opticians.
As mentioned in our previous articles/briefings, this grant is for locums who are trading as sole traders. If you are an employer who has staff furloughed or are an ‘owner managed business’ furloughed director, then please click here to see the updates on the furlough scheme, also released on 12th June 2020.
The second phase of the SEIS grant will be open to applicants from August 2020. Again, you do not have to do anything, as HMRC will invite you to apply. The grant this time will be capped at 70% (not 80%) of your average monthly trading profits, hence a maximum of £6,570 can be claimed. This grant will be taxed as normal.
The key thing to note from this new update is that your trade needs to have been adversely affected on or after 14 July. Why the 14th July? We do not know.
Now as we move into the amber position, which I think means we can start to test private patients if they want an eye test, is there a possibility that locum work will be more into in normal full flow by 14th July and hence trade is not adversely effected. Something to consider? HMRC do state that if you have been affected, but things are likely to pick up, then you can only claim under round 1 (the latest by which you can claim for that is 13th July, if not already claimed).
From first read of the new criteria regarding the 14th July date, it now seems like if your income has been reduced in the 6 weeks from 1 June 2020 to 13 July 2020, but post 14th July things have picked up, then you may have no entitlement to round 2 of the SEIS grant.
HMRC have provided an illustration to demonstrate what they mean by “adversely affected”. In their example they use the case of a builder, however we can easily replace them to be locum Optometrist or Dispensing Optician, as we locums also work on short term contracts (day contracts) and due to lockdown had little to no work from March to mid-June. We are now starting to see an increase in potential locum work as a result of Opticians opening again for routine eye tests (private only at the time of writing this article). To view the example provided by HMRC, please click here.
Unfortunately, there is no further information given provided in on this regard, such as a quantum on the condition ‘adversely affected’. We know from round 1 SEIS grant that, to be ‘adversely affected’ it could be for any amount and for any part of the period, even if it was for only one month out of the three.
HMRC gives the following examples of how a business could be adversely affected by COVID-19:
1) You’re unable to work because you:
- are shielding themselves or someone else in their household
- are self-isolating
- are on sick leave because of coronavirus
- have caring responsibilities because of coronavirus
2) You’ve had to scale down or temporarily stop trading because:
- your supply chain has been interrupted
- you have fewer or no customers or clients
- your staff are unable to come in to work
- you have fewer or no custmers or clients (I think its fair to say our rates have took a hit and this is what we are being told is the reason for it, so then we should be able to claim on this basis alone)
So for locums who do plan to start working again and might notice that despite working again they are earning half of what they earned in the same period last year can still find themselves being ineligible for the round 2 of the SEIS grant. It seems like the criteria is based on on whether or not you are actually able to go back to work or not. Does it extend to mean that only those who still have their place of work closed ot those who have to self -isolate can qualify for the round 2? We are trying to find out.
A common question we get asked by Optometrists or Dispensing Opticians is how will HMRC know? We ourselves do not know this but we do know when claiming for round 2 SEIS grant, they wont do any due diligience but just get you to declare that you were adversely affected. They will most likely carry out their investigation when you file your next year tax returns. If you guys are following our social media platforms you must have noticed the article we posted where Rishi Sunak has decided to give HMRC draconian powers to reclaim hundreds of millions in Coivd19 support payments.
We at Locumkit will follow up on this and get back to you de-mystifying with further clarification on the vague guidance provided to date, as and when HMRC release more detail. matter. We shall will also keep an eye on how the situation develops changes in the locum market, to determine see how it can potentially interact interacts with round 2 of the SEIS claim.
For those locum Optometirsts or Dispensing Opticians who have taken on the NHS Clinical Contact Caseworker job, any income from there shall not have an impact on round 2 SEIS grant, as it is deemed an entirely a completely different occupation.
To read the actual update please click here
If you have any questions in regards to the SEIS scheme or any other accounting related queries then feel free to drop me an email and I or someone from the Locumkit team shall get back to you - [email protected]
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