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On 9th April, HMRC updated their SEISS online guidance in respect of the fourth grant available to self-employed individuals and members of partnerships that have been impacted by coronavirus (COVID-19).

The fourth grant covers the 3 month period from February to April 2021 and there will also be a fifth grant covering May to September 2021.  Where the eligibility criteria is met, the fourth grant can be claimed via HMRC’s online service portal from late April 2021 and will be paid by HMRC within 6 working days.  The grant must be claimed on or before 1 June 2021.

How to claim

In order to claim HMRC state that the following information will be required:

  • Self Assessment Unique Taxpayer Reference (UTR)
  • National Insurance number
  • Government Gateway user ID and password
  • UK bank details including account number, sort code, name on the account and address linked to the account

HMRC guidance advises that claimants may also need to answer questions about their passport, driving licence or information held on their credit file.  If a claimant does not have a Government Gateway ID or password, one can be created when making the claim.

HMRC have advised that they will contact potential claimants in mid-April, by email, letter or within the online service, advising the date from which claims can be made.

Eligibility

Only self-employed individuals or a member of a partnership are eligible for the grant (not those who trade through a limited company or a trust).

The claimant must have traded in both the 2019/20 and the 2020/21 tax years and the 2019/20 tax return must have been submitted to HMRC on or before 2 March 2021. Additionally, the claimant must either:

  • Be currently trading but is impacted by reduced demand due to coronavirus
  • Have been trading but is temporarily unable to do so due to coronavirus

In order to be eligible, the claimant must also declare that they:

  • Intend to continue to trade
  • Reasonably believe there will be a significant reduction in their trading profits.

HMRC have provided examples of what is meant by reduced activity, capacity and demand for the purposes of eligibility for the grant that can be found here. 

No claim can be made where trading profits exceed £50,000 or are less than non-trading income received. HMRC will first apply this test to the 2019/20 tax year, based on the submitted tax return, and if the eligibility test is not met they will then apply it to average trading profits from the 2016/17 to 2019/20 tax years.

How much can you claim?

The fourth grant is calculated at 80% of 3 months’ average trading profits. It will be paid out in a single instalment and capped at £7,500 in total. 

The grant will be subject to Income Tax and National Insurance Contributions and must be reported on claimants 2021/22 tax returns.

If you have any queries, please do not hesitate to contact me or your local Thomas Westcott advisor.