The Chancellor’s Budget brought some good news for employers and employees with the extension of the furlough scheme until the end of September.
Added to this was announcement that the Self-Employment Income Support Scheme (SEISS) will continue until September, with a fourth and fifth grant.
The fourth was already on the cards but news of the fifth round means SEISS will continue to run alongside the furlough scheme.
The Chancellor also announced that an extra 600,000 self-employed people, who became self-employed during the 2019/20 tax year, will be eligible for the fourth and fifth rounds of SEISS. They were unable to claim for the first three.
To qualify, their 2019/20 self-assessment tax return must have been completed by 2 March 2021, at the latest.
The Government will pay a taxable grant calculated based on 80 per cent of three months’ average trading profits, paid out in a single payment and capped at £7,500 in total. The value of the grant is based on average trading profits for up to four tax years between 2016 to 2020, where available.
The grant will be available to claim by late April. As with previous grants, trading profits must be no more than £50,000 and at least equal to non-trading income in order to claim the fourth SEISS grant.
Eligibility for the fourth SEISS grant will depend on whether a significant financial impact from coronavirus was experienced between February 2021 and April 2021.
HMRC will take into account the 2019/20 return when assessing eligibility for the scheme. This may also affect the amount of the fourth grant, which could be higher or lower than previous grants received.
Applicants will need to make an make an honest assessment that there has been a significant reduction in trading profits due to reduced demand or inability to trade, and record-keeping of this evidence is essential.
HMRC will contact people it believes are eligible, from mid-April. Claims for the fourth SEISS grant must be made by 31 May 2021, at the latest.
The Government has also announced that there will be a fifth and final SEISS grant, covering the period between May and September, which eligible people can claim from late July.
The amount of the fifth grant will be determined by how much turnover has been reduced. The grant will be worth 80 per cent of three months’ average trading profits, capped at £7,500, for those with a higher reduction in turnover (30 per cent or more).
For those with a lower reduction in turnover, of less than 30 per cent, the grant will be worth 30 per cent of three months’ average trading profits. Further details will be provided on the fifth grant in due course.
For anyone wanting help and advice on self-assessment, self-employment or making a claim for SEISS please contact the Swindon accounts’ team at Optimum.