The Government has recognised the ongoing impact that COVID-19 has had on self-employed individuals and have announced that there would be a fourth grant, which will be available in April 2021.
At the Budget in March, the Chancellor confirmed that he would set the fourth grant at 80% of the average trading profits across three months, paid out in a single instalment, capped at £7,500.
SEISS fourth grant
The fourth grant will also take into account 2019/20 tax returns and will now also be open to those who became self-employed in the tax year 2019/20. Doing this gives many other individuals access to much-needed funding.
Eligibility for the scheme will now be based on your filed 2019/20 tax return, which may also affect the amount of the fourth grant, which could be higher or lower than previous grants you received. Your trading profits must be no more than £50,000 and at least equal to your non-trading income, and you must also have submitted your 2019/20 tax return by 2 March 2021.
You must either:
- be currently trading but are impacted by reduced demand due to coronavirus
- have been trading but are temporarily unable to do so due to coronavirus
You must also declare that:
- you intend to continue to trade
- you reasonably believe there will be a significant reduction in your trading profits due to coronavirus
HMRC’s online claim service for the fourth grant will be available from late April 2021 until 31 May 2021. If you are eligible, HMRC will contact you in mid-April to give you a date from which you can make your claim.
SEISS fifth grant
The Government also announced that there would be a fifth and final grant covering May to September, which you will be able to claim from late July (if you are eligible).
The amount of the fifth grant will be determined by how much your turnover has been reduced from April 2020 to April 2021.
The fifth grant will be worth:
- 80% of 3 months’ average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more
- 30% of 3 months’ average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%
HMRC will provide further details on this fifth grant in due course.
Over the past 12 months, many smaller businesses have experienced trading difficulties but have ambitions of returning to a sense of normality.
Such grants could well be what you or your business needs in current circumstances, whether to provide living costs, working capital, paying other debts, or investing in new equipment.
Support for newly self-employed
Many thousands of individuals have also commenced Self Employment in the tax year 2019/20 and unfortunately could not claim the previous SEISS grants. The new criteria mean that those can now claim a much-needed cash grant.
This article was written by James Elvin, Manager at Price Bailey. For any questions regarding this article, you can contact James on the form below.
We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.