BUSINESS owners who are struggling due to coronavirus may find themselves ruled out of the second self-employment grant as guidelines state you have to prove your work has been affected AFTER July 14.
The second self-employment income support grant is due to go live for applications in August, after Chancellor Rishi Sunak confirmed the scheme will be extended by another three months.
But fears are growing that some businesses will miss out on the second grant if they can’t prove their work has been disrupted after mid-July – even if they’re already struggling.
It’s been assumed that the first grant covers three months’ worth of loss of earnings – March, April and May.
Official guidance on the HMRC website states that in order to be eligible, you must show that your “business has been adversely affected on or after 14 July 2020”, meaning June and half of July’s loss of earnings are not covered.
And in order to get the cash, you will have to prove that your earnings are still taking a hit, before making the claim in August.
The rule has been described as “bizarre” by MoneySavingExpert founder Martin Lewis, who pointed out the wording of the guidance in his latest newsletter.
He said: “It’s very strange to read the new rule that says you have to declare your business was impacted after mid-July, and unfair on businesses heavily impacted in June and recovered by then.”
Salman Haqqi, personal finance expert at money.co.uk, also called the guidance “unclear” and said it could mean some self-employed workers will miss out on support.
He told The Sun: “The encouraging news is that some have seen businesses start to recover over the past few weeks.
“However, this may now impact on their eligibility to claim support for the weeks where their income was severely reduced, which could be devastating to those struggling to make ends meet.”
MoneySavingExpert pointed out that some businesses could potentially be able to apply for the scheme later down the line once their situation is more clear, depending on the end date for applications.
This means that if businesses are fine now, but start to struggle later on, say in September, they may be able to still apply for the grant.
This will all depend on when the closing date will be and won’t be helpful for some businesses if the scheme is given a short deadline.
The government has yet to announce the opening and closing date for applications for the second grant, although it has said the scheme will start again at some point in August.
It has already confirmed that workers will get less cash with the second grant, with the help being offered reduced to 70 per cent of earnings, down from 80 per cent.
The second grant will see workers able to claim a maximum of £6,750 if they’re unable to work – previously they could claim up to £7,500 through the first grant.
Business owners can apply for help even if they didn’t claim for the first grant, providing they meet the criteria in the box above.
Like last time, it’s expected that the government will allow applications via its Gov.uk website.
Around 2.3million self-employed workers were successful in applying for the first round of the scheme, which covered March, April and May.
When The Sun asked HMRC for more guidance for businesses, a spokesperson told us the self-employed income support grant is not month specific.
Instead, they describe it as a lump sum which is calculated by three months worth of profits.
If someone finds their business is being impacted now, HMRC is advising them to claim the first grant from the scheme.
If you’ve yet to apply for the first grant, you have around four weeks left to do so – read our handy guide to find out the closing date and how to apply.
Some workers have complained that they are missing out on government help because of holes in the scheme.
If you’re not eligible for the SEISS or furlough schemes, you can apply for help through Universal Credit.