SEISS broadens eligibility to cover new parents and reservists

22 June: HMRC has announced changes to the Self-employment Income Support Scheme (SEISS) for new parents and reservists. ICAEW understands that the changes will benefit fewer new parents than might be expected.

The government has announced that the SEISS will be changed to include some parents who have taken time out to have children and that self-employed army, navy and air force reservists who are currently ineligible for the SEISS as a result of their service will be able to access a grant.

However, ICAEW’s Tax Faculty warns: “While further detail from HMRC is awaited, we understand that the change for new parents is very limited.”

The change will affect the eligibility criteria for the grants; new parents who did not submit a 2018/19 tax return, or whose trading profits were less than their other income in that year (the 50% test), may now be eligible.

If someone was ineligible for either of those reasons because they were taking time out to care for a newborn child, HMRC will determine eligibility on the basis of the 2017/18 and 2016/17 tax returns.

The change is expected to operate in a similar way for reservists but, in addition, income they have received as a reservist is likely to be disregarded when establishing eligibility. 

The Tax Faculty says: “This change will not benefit the cases reported to us where parents were already eligible for a grant, but received a lower amount because their income from  self-employment was reduced in the period on which the grant was based.”   

HMRC is expected to update its guidance: How different circumstances affect the Self-Employment Income Support Scheme when further details are available.

The changes to the SEISS eligibility comes a week after a similar expansion to those eligible for the Coronavirus Job Retention Scheme.