Self-employed Income Support Scheme: fourth grant

In the Spring Budget, the Government confirmed that the Self-Employment Income Support Scheme (SEISS) would be extended to provide a fourth and fifth grant. Here we have provided some details of the fourth SEISS grant which covers the period of 1 February to 30 April 2021. The application window for the fourth grant closes on 31 May 2021.

Eligibility

The eligibility conditions for the grant are as follows:

• The individual must be self-employed or a member of a partnership
• The business must have traded in both the 2019/20 and 2020/21 tax years
• The 2019/20 tax return must have been submitted to HMRC on or before 2 March 2021
• The business must either be currently trading but impacted by reduced demand, or temporarily unable to trade due to coronavirus
• The business must intend to continue to trade
• There must be a reasonable belief that there will be a significant reduction in trading profits

Eligibility for the fourth grant is based on the 2019/20 tax return. Your trading profits must be no more than £50,000 and must be at least equal to or more than any non-trading income. If you do not qualify based on your 2019/20 tax return, HMRC will look back over the previous three tax years and consider the average profits and level of non-trading income.

Impact assessment

HMRC expects those claiming to make an honest assessment of the impact of coronavirus on their business. You therefore must reasonably believe that your business will suffer a significant reduction in profit, due to reduced business activity, capacity or demand, or an inability to trade between 1 February and 30 April 2021. You must keep evidence that shows how the business has been impacted. HMRC has provided some examples of reduced activity, capacity or demand.

Payment

The calculation of any SEISS payment will be based on the average profit using up to four years of submitted returns, depending on how long you have traded. Any amendments to tax returns submitted on or after 3 March 2021 won’t be taken into account. If an amendment has been submitted on or after 3 March lowers the amount that you are eligible for, you must notify HMRC within 90 days and you may need to pay back some or all of the grant.

If your profit in 2019/20 was affected by having a new child, and this would mean that you are not eligible for the fourth grant, you may still be able to make a claim. You must have submitted a tax return for 2018/19 and meet all other eligibility criteria. You would also need to contact HMRC before making any claim.

If you would like any further advice, please contact a member of our Business Tax team on 01903 234094.