Details of fourth self-employed income support grant

The Self-Employed Income Support Scheme (SEISS) like the CJRS scheme for employers has been extended to September 2021 and the details for claims for this fourth grant have now been released.  This fourth grant covers the period of February, March and April 2021.  A fifth grant will be announced to cover May to September 2021.

The latest grant allows the self-employed to claim 80% of their average profits for the period up to 2019/20, and is again limited to £2,500 a month, as with previous grants.

As with CJRS, there are lots of conditions that need to be satisfied such as being self-employed in 2019/20 and continuing to trade in 2020/21 (or would be doing so if the business had not been impacted by coronavirus.)

To make a successful claim the profits from self-employment on 2019/20 must not exceed £50,000 and must be more than 50% of total income.  If you do not satisfy that test, then the same £50,000 and 50% tests are applied to average profits and total income over the four years (or shorter period) to 5 April 2020.

This provides good news for those newly self-employed individuals who commenced trading in 2019/20 will now potentially be eligible for SEISS grants, having not previously qualified for the first three grants. HMRC will contact you directly, based on your registration application for self-employment.

Conditions for the fifth grant will also likely be linked to a reduction in business turnover.

Self-employed individuals whose turnover has fallen by 30% or more will continue to receive the full grant worth 80% of three months’ average trading profits, capped at £7,500. People whose turnover has fallen by less than 30% will receive a 30% grant, capped at £2,850.

Be sure to keep a close eye on the impact of the pandemic on your business; it isn’t clear yet what measures HMRC will take to check on the amounts claimed by businesses, compared to profits generated in earlier years. Be sure to keep all paperwork relating to grants received, as don’t forget these are taxable, and also any and all evidence to support a drop in business turnover for periods where grants have been claimed.

Further details of the fifth grant calculation are still to be released.

If you have concerns about claims you’ve made, or you’re uncertain about your eligibility due to changes in your business, contact Tanya Ibberson at tanya@fdbs.co.uk.