The SEISS scheme introduced by the government in 2020 following the lockdown has been extended to September 2021 with a fourth and fifth grant. The self employed who will be eligible for the scheme will be contacted by HMRC from Mid-April on how to claim.
The good news is that the fourth and fifth grant will now take into consideration the 2019 to 2020 tax returns and will also be open to those that became self employed in the same period. This implies that those that were self employed but not eligible for the previous grants may now be eligible.
The catch: You need to have submitted your tax return by the 1st March 2021. That’s the latest. So if you have not submitted the return yet, this may turn out to be very bad, you lose out AGAIN unfortunately.
For the fourth grant, the UK government will pay a taxable grant which is calculated based on 80% of three months average trading profits. This will be paid out in a single payment and capped at £7,500 in total. On this occasion unlike the previous grants, this will be based on the average trading profits for up to four tax years between 2016 and 2020 if HMRC has those records.
Claim date: The grant will be available to claim by the late April and as with previous grants, the trading profits MUST be no more than £50,000.
Eligibility: This will be dependent on whether you experienced a significant financial impact from corona virus between Feb 2021 and April 2021. HMRC will take into account your 2019 – 2020 return when assessing your eligibility for the scheme which may also affect the amount for the fourth grant. This could be higher or lower than the previous grants you may have received.
You will need to make an honest assessment that there has been a significant reduction in trading profits due to reduced demand or the inability to trade. When a claim is made, you MUST keep appropriate records as evidence.
Claim Expiry: All claims for the fourth SEISS grant must be made by 31st May 2021.
The Chancellor also stated that the government will also offer the self employed a fifth grant and this is very much likely to be the final grant. It will cover the period from May to Nov 2021 with claims likely to be made by the end of July 2021 if you are eligible.
The amount of the fifth grant will be determined by the turnover, how much it has reduced. This grant will be worth 80% of three months average trading profits capped at £7,500 for those with a higher reduction in turnover, this being 30% or more. For those with a lower reduction in turnover of less than 30%, the grant will be worth 30% of three months average trading profits. No further details provided on this grant at this moment in time but all will come to light sometime in June or early July.
For more information: HMRC SEISS extended