COVID-19 Update #139: Self-Employment Income Support Scheme (SEISS) – fourth grant

In the Spring Budget 2021, Rishi Sunak outlined further support for self-employed workers.

In addition to the upcoming fourth grant, there will also be a fifth Self-Employment Income Support Scheme (SEISS) grant covering the five months to 30 September 2021.

What’s more, the chancellor has extended the scheme to include some workers who were previously excluded. Anyone who commenced self-employment in 2019/20 and submitted their 2019/20 tax return by 2 March 2021, will now be able to make a claim. This will open the scheme up to a further 600,000 workers.

The fourth SEISS grant will be set at 80% of three months’ average trading profits. As always, this will be paid out in a single instalment and will be capped at £7,500.

The fourth grant will take into account 2019 to 2020 tax returns, but the rest of the eligibility criteria remains unchanged.

Conditions for the fifth grant will be linked to a reduction in business turnover. Self-employed individuals whose turnover has fallen by 30% or more, will continue to receive the full grant worth 80% of three months’ average trading profits, capped at £2,500 a month.

Those whose turnover has fallen by less than 30%, will receive a 30% grant which will be capped at £950 a month.

We’re awaiting further details of the fifth grant but will keep you updated as soon as we get more information.

Eligibility for the SEISS fourth grant

Eligibility for the scheme will now be based on your submitted 2019 to 2020 tax return. This may affect the amount you receive so while some people may be entitled to more compared to previous grants, others may get less.

To be eligible for the fourth grant, you must be a self-employed individual or a member of a partnership.

Your trading profits must be no more than £50,000 per year and be at least equal to your non-trading income.

If you’re not eligible based on your 2019 to 2020 Self-Assessment tax return, HMRC will look at the tax years 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020.

You must also have traded in both tax years:

• 2019 to 2020 and have submitted your tax return by 2 March 2021
• 2020 to 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 reduced business activity, capacity, demand or inability to trade due to coronavirus

In order to allow HMRC to process recently submitted 2019 to 2020 Self-Assessment tax returns, the online claims service for the fourth grant will only be available from late April 2021. Claims for the fourth grant can be made until 31 May 2021.

If you are eligible, HMRC will contact you in mid-April to give you a personal claim date. This will be the date that you can make your claim from.

There will be more guidance about the fourth and fifth grants in due course but you can head to the gov.uk website for further information.

If you would like help calculating how much you’ll receive for the upcoming SEISS grants, please don’t hesitate to get in touch with PKB and we’ll be happy to assist.