Details of the fourth SEISS grant
May 12, 2021
Like the CJRS scheme for employers, the Self-Employed Income Support Scheme (SEISS) has been extended to September 2021, and details of claims for the fourth grant have now been released. This fourth grant covers the three months from 1 February to 30 April 2021. There will then be a fifth grant covering May to September 2021.
If you’re self-employed you have until the deadline of 1 June 2021 to make your claim.
The latest grant allows the self-employed to claim 80% of their average profits for the period up to 2019/20, and it is once again limited to £2,500 per month.
Like CJRS there are lots of conditions that need to be satisfied in order to make a successful claim:
- You were self-employed in 2019/20, and your 2019/20 tax return was submitted before 3 March 2021.
- You must also have continued trading in 2020/21 (or you would have done so had your business not been impacted by coronavirus), and you are intending to continue trading in 2021/22.
- You must have reasonable belief that you have suffered a significant reduction in your trading profits due to reduced income (not just increased costs) between February and April 2021, as a direct result of reduced business activity or inability to trade due to coronavirus.
In order to be able to make a successful claim your profits from self-employment in 2019/20 must not have exceeded £50,000, and nor must they be more than 50% of your total income. If that test is not met, then the same £50,000 and 50% tests are applied to your average profits and total income over the four years (or shorter period) to 5 April 2020. This means that anyone who started trading in 2019/20 will now potentially be eligible for SEISS grants, even if they didn’t previously qualify for the first three grants.
More details of how HMRC calculates your eligibility for a grant are available on the Gov.uk website.
How to make a claim
If you are eligible for the fourth SEISS grant, at some point from mid-April 2021 you should have received a communication from HMRC via email or letter, providing you with your personal claim date.
This personal claim date is the earliest point from which you can make your claim. The online service to claim the fourth grant is now available, and will remain open until 1 June 2021.
To confirm your eligibility and make your claim you will need your NI number, Unique Taxpayer Reference, Government Gateway user ID and bank account details. If you’ve been excluded from claiming the previous grants and this is your first time claiming, you may also be asked to prove your identity by providing details such as your passport, tax return, P60 or tax credit claim.
Once your claim for the SEISS grant has been approved, the money should be in your account within six working days.
Tax on SEISS payments
You must pay tax and Class 4 National Insurance contributions on any SEISS grants you receive. For SEISS 4 this will be due in the 2021/22 tax year, the year in which the grant is made, even though two of the qualifying three months are not in 2021/22.
You must declare any SEISS grants received on your self-assessment tax return, as separate income to normal business turnover.
HMRC checks and penalties
HMRC has stated that all SEISS claims will be checked. This will focus on your entitlement to make a declaration, since HMRC itself is determining eligibility and amount. SEISS claims are likely to be compared with turnover and profits on self-assessment tax returns for 2020/21 and eventually with 2021/22 tax returns.
If you receive a grant without realising that you weren’t entitled to make a claim, then you won’t be penalised by HMRC – so long as you notify HMRC within 90 days of receiving the grant, and you repay it by 31 January 2022. Any wrongly claimed SEISS grants much be included on your tax return.
If you don’t notify HMRC, they will treat your over-claim as deliberate, and they can then charge you a penalty of up to 100% on the amount of the SEISS grant that you were not entitled to receive.
If you make a claim, make sure you keep appropriate records as evidence of the impact on your business.
Fifth SEISS grant
A fifth SEISS grant will be available to cover the three months from 1 May to 31 July 2021. The portal for the fifth grant is expected to open in late July 2021.
Conditions for the fifth grant will be linked to a reduction in business turnover. If your turnover from self-employment has fallen by 30% or more, then you’ll continue to receive the full grant worth 80% of three months’ average trading profits, capped at £7,500. If your turnover has fallen by less than 30%, you will receive a grant worth only 30%, which is capped at £2,850. We are still awaiting further details of the fifth grant calculation.
Although we cannot make an SEISS claim on your behalf we can help you determine whether or not you are eligible, and assist you with your claim if required so please do get in touch.