PWA – Self Employed 4th Grant (April 26th 2020) – all you need to know

CORONAVIRUS- SELF EMPLOYED GRANT

 

SEISS Round Four Launched

HMRC has published details on the fourth Self Employment Income Support Scheme (SEISS) grant.

 

How much?

The fourth Self Employment Income Support Scheme (SEISS) grant covers the period 1 February 2021 to 30 April 2021.  It amounts to 80% of your trading profits, capped at £7,500 and paid in one instalment.  What you get depends on your average profits over a three month period and whether you meet the conditions.

 

Tax Return Condition

The first hurdle is that you must have filed your 2019/20 return by midnight on 2 March 2021.  If you didn’t, you will not get the grant, unless you can convince HMRC that special circumstances prevented you from filing your return by the deadline.

 

Other Conditions

The other conditions are similar to previous SEISS grants.  Specifically,

  1. You must have traded in the tax years 2019/20 and 2020/21.
  2. For the period 1 February to 30 April 2021 you must either have traded with reduced activity, capacity or demand because of the pandemic or were unable to trade because of it.
  3. Plus, you must intend to carry on or restart trading.
  4. Your self employed income must be more than 50% of your total income

 

Your annual profits must not have exceeded £50,000 for 2019/20 and must be at least equal to your non-trading income.  If you don’t quality based on 2019/20, HMRC will take an average for the four years 2016/17 to 2019/20.

 

Changes to the Small Print

The SEISS 1 and 2 required that your business had to be “adversely affected by coronavirus”.  The SEISS 4 (and the SEISS 3) is subtly different; you need a “reasonable belief” that your profits have reduced.

Keep evidence (profit projections etc) to show why you believe your profits will be less for the period 1 February to 30 April 2021 and that this will “significantly” reduce them for the tax year for which you’ll report them on your self assessment.

 

 

New Business

If you started in business in 2019/20 you may be eligible.  But if you gave up a job and started self employment late in the tax year, there’s a chance that you won’t have enough self employed income to pass the 50% test and other SEISS eligibility tests (see above)

 

Different Numbers

HMRC will do the calculations for you.  It will look at tax returns for the previous four years or less time if you started self employment more recently.  Because everything has moved on a year since the first SEISS grants, the figures considered by HMRC will now be different.  This means that the amount is likely to differ from your previous SEISS payments.

 

When and How?

The online claims service goes live from late April.

If you’re eligible, HMRC will contact you from mid-April to give you a date from which you can claim.  This will be by e-mail, letter or via its online service.

You must claim by 1 June 2021.