Self-Employment Income Support Scheme (SEISS) Fourth Grant

31st March 2021

In the March Budget, the Chancellor announced a fourth SEISS grant will be awarded. Unlike previous SEISS grants, those who were previously ineligible (as they did not trade in 2018/19 but did trade in 2019/20) may now be eligible for this payment.

This grant is intended to cover the three months ending April 2021. Note, this grant like previous SEISS grants will be taxable income in the year of receipt.

What is the Eligibility Criteria?

To qualify for the grant the following must apply

• You must be a sole trader or a partner in a partnership.
• You must have traded in 2019/20 and be trading in 2020/21.
• Your personal Tax Return for 2019/20 must have been submitted by 2 March 2021.
• Trading profits must be no more than £50,000 in 2019/20 and must make up at least half of your total taxable income for the year.

It is worth noting, that if you miss out on being eligible based on the final requirement listed, HMRC will look at your average totals in the four tax years from 2016/17 to 2019/20 to determine your eligibility.

As with previous SEISS claims the applicant must either 1) be trading but impacted by reduced demand due to the Covid – 19 pandemic  2) be temporarily unable to trade due to the pandemic.

HMRC, also state that the applicant will need to declare that they 1) intend to carry on trading 2) anticipate a significant reduction in business activity and profits due to the current crisis.

How Much is This Grant?

Like previous payments the award will be capped at the lower of 1) £7,500 2) 80% of 3 months’ average trading profits. This average is based on the tax years 2016/17 – 2020/21.

How do I Claim?

HMRC will contact eligible applicants in mid-April 2021. It is expected that the closing date for these claims to be processed is 31 May 2021.

Future Support

A fifth SEISS grant will be rolled out in due course to cover the period from May 2021 to September 2021. HMRC have stated that claims may be made from late July 2021 for this grant.

More details are to follow but we do know that, the grant awarded will partly be based on the reduction of turnover in the 2020/21 tax year. The award will be:

1. For those with a 30% decrease in turnover, 80% of 3 months’ average trade profits capped at £7,500.
2. If average profits have decreased less than 30%, the grant will be capped at £2,850.

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