The Self-Employment Income Support Scheme (SEISS) was made available to provide financial support for individuals who are self-employed or a member of a partnership, who meet the eligibility conditions and have been adversely affected by coronavirus (COVID-19). Applications for the fourth grant under the SEISS can now be made online.
The fourth SEISS grant covers the three-month period from 1 February 2021 to 30 April 2021. It will enable taxpayers to claim a taxable grant of 80% of three months’ average trading profits, paid out in a single instalment, capped at £7,500 in total. Claims must be made on or before 1 June 2021.
Unlike the first three grants, the fourth grant will take into account 2019/20 tax returns and will be open to those who became self-employed during the 2019/20 tax year.
The fourth SEISS grant will only be available to eligible individuals who are self-employed or a member of a partnership. The main change in the eligibility conditions from the first three grants is that those who became self-employed after 5 April 2019 are now also eligible. HM Revenue & Customs (HMRC) have also updated their guidance to clarify what is meant by ‘adversely affected by the pandemic’. Individuals can claim the fourth grant even if they did not apply for the one of the previous three grants.
Who can make a claim?
Individual taxpayers can make a claim for SEISS if they meet the following conditions:
- they traded in the tax year 2019/20 and submitted their Self-Assessment tax return on or before 2 March 2021 for that year;
- they traded in the tax year 2020/21;
- they intend to continue to trade in the tax year 2021/22; and
- they are either currently trading but are impacted by reduced demand due to coronavirus, or are temporarily unable to trade due to coronavirus.
Tax payers will be required to declare that they intend to continue to trade and reasonably believe they will have a significant reduction in their trading profits.
Eligibility for the scheme:
If taxpayers have established that they can make the claim, the conditions for eligibility for SEISS are initially based on their 2019/20 Self-Assessment tax return trading profits as follows:
- They must be no more than £50,000;
- They must be at least equal to non-trading income;
- If they are not eligible based on the 2019/20 Self-Assessment tax return, HMRC will then look at the tax years 2016/17, 2017/18 and 2018/19.
Taxpayers can access HMRC’s eligibility checker on the following link https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference where taxpayers will be required to add their Tax Reference UTR and National Insurance number.
How much will be paid?
Taxpayers will get a taxable grant based on their average trading profit over the 4 tax years; 2016/17, 2017/18, 2018/19 and 2019/20. HMRC will work out the average trading profit by adding together the total trading profits or losses for the 4 tax years, then dividing it by 4. The grant will be 80% of their average monthly trading profits, paid out in a single instalment covering 3 months, and capped at £7,500 in total. The online service will tell the individual how HMRC have worked the grant out when the application is made.
How does a taxpayer make a claim?
Taxpayers will need to have the following details to hand to make a claim:
- Self-Assessment UTR;
- National Insurance number;
- Government Gateway user ID and password;
- Bank account number and sort code you want HMRC to pay the grant into. This must be a bank account details where a Bacs payment can be accepted.
Individuals will also have to confirm to HMRC that their business has been adversely affected by coronavirus on or after 1 February 2021 and if the grant is claimed HMRC will treat this as confirmation they are below the state aid limits.
The HMRC online service is now open to taxpayers and HMRC have already started contacting taxpayers whom they consider may be eligible.
As for the first three grant agents will be unable to make a claim on behalf of taxpayers so individuals will need to make their own arrangements to make a claim.
Practical issues to consider when making a claim for SEISS:
- If taxpayers have other income such as from pensions, rental profits or large dividends they may not be eligible;
- Those that are not eligible for SEISS may need to seek alternative support;
- The claim must be completed personally as it is not possible for agents to process the claim on their behalf;
- If individuals do not have a Government Gateway ID it can created when they make a claim;
- HMRC will check claims and take appropriate action to withhold or recover payments found to be dishonest or inaccurate;
- Anyone unable to claim online can use a telephone based application, further details are awaited;
- The grant will be included as taxable income in 2021/22;
- Individuals must keep any evidence that their business has had either reduced activity or been unable to trade due to coronavirus;
- If an amendment to a tax return on or after 3 March 2021 lowers the amount an individual is eligible for, then they must inform HMRC within 90 days.
If the taxpayers business recovers after a claim is made, their eligibility for the grant will not be affected since the claim is based on a taxpayers reasonable belief that their trading profits would have been significantly reduced at the time of making the claim. Again tax payers must keep evidence to support this.
This is only an outline of the SEISS and further details about the claim can be found at https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme.
A fifth and final grant will be available from late July 2021 and will cover the three month period from May to September 2021.
If you have like more information or if you require assistance in determining your eligibility for the fourth SEISS grant please speak to your usual contact at the firm.
Coronavirus Job Retention Scheme (CJRS) update
For periods starting on or after 1 May 2021 employers will be able to make a furlough claim for employees, on any type of employment contract, who were employed and on the PAYE payroll on 2 March 2021. Previously claims had been restricted to employees on the payroll at 30 October 2020.
The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 April 2021 notifying a payment of earnings for that employee. The employees do not need to have previously been furloughed.
Our Current working arrangement – We remain ‘Open for business’
Our staff have returned to office based working on a rota basis, each attending two days a week, whilst continuing to work from home at other times. They can still be contacted in the usual way either via email or by calling the office number where reception will divert your call to the appropriate staff member.
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