Coronavirus: How your trading conditions affect your eligibility for the Self-Employment Income Support Scheme
[WITHDRAWN] Find out how to decide if your business has been impacted by COVID-19 and how this affects your eligibility for a SEISS grant
This guidance was withdrawn on 1 October 2021.
Claims for the fifth SEISS grant have now closed. The last date for making a claim was 30 September 2021.
- find out what coronavirus (COVID-19) support is available for businesses
- check how much you were paid for previous grants
If you received a grant payment, you must report this on your tax return. Find out how to report SEISS grants.
You must reasonably believe that you’ll suffer a significant reduction in trading profits due to reduced business activity, capacity, demand or inability to trade due to COVID-19- between 1 May 2021 and 30 September 2021. You must keep evidence that shows how your business has been impacted by COVID-19 resulting in less business activity than otherwise expected.
HMRC expects you to make an honest assessment about whether you reasonably believe your business will have a significant reduction in profits.
Before you make a claim, you must decide if the impact on your business between 1 May 2021 and 30 September 2021 will cause a significant reduction in your trading profits for the tax year you report them in.
HMRC cannot make this decision for you because your individual and wider business circumstances will need to be considered when deciding if the reduction is significant.
You should wait until you have a reasonable belief that your trading profits are going to be significantly reduced, before you make your claim.
You do not have to consider any other COVID-19 scheme support payments that you have received when deciding if you’ve had a significant reduction in your trading profits.
What is meant by impacted by reduced activity, capacity and demand
This applies to your business if it has been impacted by reduced activity, capacity or demand due to coronavirus. For example, you:
- have fewer customers or clients than you’d normally expect, resulting in reduced activity due to social distancing or government restrictions
- have one or more contracts that have been cancelled and not replaced
- carried out less work due to supply chain disruptions
You must not claim if the only impact on your business is increased costs. For example, if you’ve had to purchase face masks and cleaning supplies. This would not be considered as reduced activity, capacity or demand.
What is meant by previously trading but are temporarily unable to do so
This applies to you if you’re temporarily unable to carry out your business activities due to coronavirus, because for example:
- your business has had to close due to government restrictions
- you’ve been instructed to shield or self-isolate in-line with Public Health Authority guidelines and are unable to work from home
- you’ve tested positive for coronavirus and are unable to work
- you cannot work due to caring responsibilities, for example as a result of school or childcare facility closures
This does not include being temporarily unable to trade because you have had to quarantine or self-isolate after returning from abroad to the UK.
If your business had to close before 1 May 2021 and continued to be closed for a period of time up to 30 September 2021, you can claim if you are eligible.
Examples of reduced activity, capacity or demand or unable to trade
These are examples of people who have been impacted by covid-19.
Reduced activity, capacity or demand and reasonable belief
A publican has fewer customers due to government restrictions which reduces their takings. They reasonably believe this will significantly reduce trading profits. They are eligible to claim the fifth grant.
A part time personal trainer works in a gym that has reduced its capacity due to government restrictions. This reduces the number of clients on the days that they work. They reasonably believe this will have a significant reduction on their trading profits. They are eligible for the fifth grant.
Reduced activity, capacity or demand and no reasonable belief
A cafe owner has fewer customers due to government restrictions on households mixing inside. They increase their prices. They believe their trading profits will not reduce significantly, so they are not eligible to claim the fifth grant.
Unable to trade and reasonable belief
A nightclub owner has had to shut their premises due to government restrictions. They will not have any income due to the closure and reasonably believe the reduction in trading profits will be significant. They are eligible to claim the fifth grant.
A builder has tested positive for COVID-19 and has to self-isolate for 10 full days. As they are unable to work from home and have a reasonable belief that there will be a significant reduction in their trading profits. They are eligible to claim the fifth grant.
Unable to trade and no reasonable belief
A mechanic was unable to work for 2 days as the premises had to be closed to be deep-cleaned due to a positive COVID-19 case. They do not believe this will significantly reduce their trading profits and are not eligible to claim the fifth grant.
A physiotherapist has tested positive for COVID-19 and self-isolates for 10 days before receiving a negative test result. During those 10 days they were unable to work from home but were able to rearrange appointments. They do not believe there will be a significant reduction in trading profits and are not eligible to claim the fifth grant.
An electrician is still trading but has had increased costs due to buying masks, cleaning supplies and screens. They are not eligible for the fifth grant because increased costs were the only impact on their business and they continued to trade as normal.
A dentist returns to the UK from abroad and has to quarantine for 10 days. As this is the only impact on their business, they are not eligible to claim the fifth grant. This is because reduced demand due to quarantining after foreign travel is not included in the eligibility criteria.
An accountant reduces business activity because they want to partially retire. They reasonably believe this will have a significant reduction on trading profits. They are not eligible for the fifth grant because the reduced business activity was not caused by COVID-19.
The client of a dog walker cancels a contract due to COVID-19. The dog walker could but chooses not to look for additional work to replace the contract. This means their business activity and trading profits are reduced because they choose not to replace the contract and not because of COVID-19. They are not eligible for the fifth grant.
An IT consultant has other income from renting property. They have made losses on renting due to renovation costs. This is not related to their trading profits from the IT consultancy service. As the IT consultancy business has not been affected due to COVID-19, they not eligible for the fifth grant.
First published: 25 November 2020
HMRC COVID-19 helpline0800 024 1222 (Mon to Fri: 8am to 4pm)