Self-employed traders must respond to HMRC’s email about their business by the 20th November 2020, failing to do so means they won’t be able to make a further SEISS (Self Employed Income Support Scheme) grant claim.

24,000 self-employed traders who have claimed a SEISS grant received emails from HMRC in October asking whether they were still trading.

Who has been contacted?

The recipients represent less than 1% of traders who claimed either or both of the first or second grants.  HMRC only communicated by email rather than post to people it believed have ceased trading.  This data could be a cessation date for the business reported on the 19/20 tax return, an application to deregister for VAT, or information from another source.

Cancelling a VAT registration does not mean the business has ceased trading, many businesses will have experienced a reduction in trade during the pandemic that could take their expected sales for the next 12 months below the VAT threshold.

How to reply

Recipients are asked to complete an online form to confirm they have stopped trading and permanently closed the business.  If the business ceased on or before the day they applied for the SEISS grant they will have to repay the funding.

If the trader does not respond to HMRC’s email by close of business on Friday 20th November they will be prevented from applying for any further SEISS grants.

Who is excluded? 

The portal to apply for the third SEISS grant opens on 30th November and the funds should be paid within six working days.  The third grant will be calculated at 80% of the average annual profits, and paid for a three month period, capped at £7,500.

However, the average profits are still based on historical profits reported for the years 16/17 to 18/19.  Self-employed individuals who started trading on or after the 6th April 2019 are excluded from the SEISS.

Of 5m people reported as self-employed in 2018/19, only 3.4m were eligible for the SEISS grant, this was due to at least half of the taxpayer’s income had to come from self-employed profits.  Also those with annual profits in excess of £50,000 were not eligible.