It was announced at yesterday’s budget that the Self-Employment Income Support Scheme (SEISS) will continue until September with a fourth and fifth grant.
The fourth and fifth grants will take into account submitted 2019-20 tax returns. This means you may be able to claim, even if they were not eligible for previous grants. You must have submitted your 2019-20 tax returns by 2 March 2021 to be eligible for the fourth and fifth grants.
Fourth SEISS grant
The UK Government will pay a taxable grant which is calculated based on 80% of three months’ average trading profits, paid out in a single payment and capped at £7,500 in total. The value of the grant is based on an average of your client’s trading profits for up to four tax years between 2016 to 2020, where available.
The grant will be available to claim from late April. As with previous grants, trading profits must be no more than £50,000 and at least equal to non-trading income in order to claim the fourth Self-Employment Income Support Scheme grant.
Eligibility for the fourth Self-Employment Income Support Scheme grant will also depend on whether your client experienced a significant financial impact from coronavirus between February 2021 and April 2021.
As the calculation now takes into account the tax year 2019-20, if you have previously claimed a Self-Employment Income Support Scheme grant, you may receive grants that are higher or lower in value than any previous Self-Employment Income Support Scheme payments you have received.
How you can claim the fourth SEISS grant
From mid-April, you will be given a personal claim date by HMRC which confirms the earliest date you can claim. HMRC are inviting customers to claim on different days to ensure the system is fast and easy to use.
The online claims service for the fourth grant will be live from late April. This will allow HMRC time to process recently submitted 2019-20 Self Assessment tax returns.
You must make your claim for the fourth grant between your personal claim date and 31 May 2021 at the latest.
Your will need to make an honest assessment that there has been a significant reduction in trading profits due to reduced demand or their inability to trade, and to keep appropriate records as evidence.
It was also announced yesterday that there will be a fifth and final SEISS grant covering May to September. The amount of the fifth grant will be determined by how much your turnover has been reduced.
The grant will be worth 80% of three months’ average trading profits, capped at £7,500, for those with a higher reduction in turnover (30% or more). For those with a lower reduction in turnover, of less than 30%, then the grant will be worth 30% of three months average trading profits.
You will be able to claim the fifth grant from late July if you are eligible. Further details will be provided on the fifth grant in due course.
Some questions and answers on Self-Employment Income Support Scheme:
When will further guidance be available?
HMRC will publish more guidance in due course.
How will I receive my personal claim date?
HMRC will contact you from mid-April by email, letter or SMS, depending on the information you have provided to them previously.
What can I do to prepare?
HMRC will send details of how to make a claim when they contact customers with their personal claim date.
In the meantime, to confirm eligibility and make a claim, you should ensure you have the following to hand:
- National Insurance number
- Self Assessment Unique Taxpayer Reference (UTR)
- Government Gateway user ID and password
- Bank account number and sort code.
If you are claiming SEISS for the first time, you may be asked additional questions to prove you identity. If this is you, you should be ready to answer questions about the following documents, which HMRC recommend you have to hand:
- UK passport
- credit file (such as loans, credit cards or mortgages)
- Self Assessment tax return (within the last 3 years)
- driving licence (DVLA UK or DVA NI)
- tax credit claim
- three most recent payslips.
What support is there if I am not eligible for Self-Employment Income Support Scheme?
Those who are not eligible for SEISS may be eligible for other elements of the financial support provided by the UK Government. This includes Bounce Back Loans, tax deferrals, rental support, increased levels of Universal Credit, mortgage holidays, and other business support grants.
More information on further support can be found by searching on GOV.UK.