Self-Employment Income Support Scheme – future grants confirmed
The UK Government has announced 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 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 SEISS grant.
Eligibility for the fourth SEISS grant will also depend on whether you have 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, you may receive grants that are higher or lower in value than any previous SEISS payments you have received.
HMRC have moved quickly to ensure they have the information they need to check customers’ eligibility before applications are open, while also protecting the SEISS from fraud. Where they need to make further checks, they will write to customers and explain that they will call them to ask for proof of identity and evidence of trade. To make these calls, they will use the telephone number on your HMRC record.
How can you claim the fourth SEISS grant?
From mid-April, you will be given their 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 is to allow us time to process recently submitted 2019-20 Self Assessment tax returns.
You must make your claim for the fourth grant between their personal claim date and 31 May 2021 at the latest.
You will need to make an honest assessment that there has been a significant reduction in trading profits due to reduced demand or your inability to trade, and to keep appropriate records as evidence.
The UK Government has also announced 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.
Questions and answers on SEISS:
When will further guidance be available?
HMRC will publish more guidance in due course.
How will you receive your 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 you do to prepare?
HMRC will send details of how to make a claim when they contact you 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 their identity. You should be ready to answer questions about the following documents, which they 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 for those who are not eligible?
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 https://www.gov.uk/
If you have any queries on the above, do not hesitate to contact us.