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Business Services  •  Business Tax  •  Coronavirus Advice  •  Personal Taxation  •  Tax Relief

Understanding Rounds 4 and 5 of COVID-19 SEISS (Self-Employed Income Support Scheme)

By RJP LLP on 16 March 2021

In the recent Budget 2021, Rishi Sunak announced some extra support available for the self-employed people previously unable to claim COVID-19 government aid through the SEISS (Self-Employed Income Support Scheme). This article explains the qualifying criteria and some important actions self-employed business owners must take if they wish to access the grants.

How the SEISS works

To recap, the SEISS is available for people who trade through a self-employed business and who have profits of less than £50,000. This must represent at least 50% of their income. The scheme has previously been criticised for failing to support the newly self-employed and the Budget on 3 March 2021 sought to address this gap.

 

New SEISS rounds 4 and 5

Now there will be two further grant rounds - SEISS 4 and 5 - before the scheme finally finishes. Although this is a grant, it is taxable.

To be eligible for SEISS 4 and 5, a taxpayer must have been trading in 2019/2020 and filed the appropriate tax return by 2 March 2021. They must also submit their 2021 self-assessment tax return (SATR) before July 2021 to be able to claim.

HMRC will be contacting the taxpayers who may be eligible to claim and they will also be calculating what is to be paid.

Note - If you are taking a break from your trade due to having a baby or adoption, or have done so since 6 April 2019, you may still be eligible. Claiming maternity allowance will not affect eligibility.

Further details and SEISS eligibility criteria are as follows:

SEISS 4 – Key points

This scheme will open in late April – date to be confirmed.
Up to 80% of a business’ average monthly trading profits can be claimed for up to 3 months.
The maximum amount claimable is capped at £7,500.

SEISS 5 – Key points

The fifth and final round of grants will cover the period from May to September. Applications are expected to open in late July – date to be confirmed. Unlike earlier schemes, the amounts available to be claimed will vary according to how much business turnover has been affected during the April 2020 to 2021 tax year period:

Category 1 - Turnover down by 30% or more: Up to 80% of average trading profits for 3 months, capped at £7,500.

Category 2 - Turnover down by less than 30%: Up to 30% of average trading profits, capped at £2,850.

Exclusions to note for SEISS 4 and 5

If any of these conditions apply, you will not be eligible to claim for SEISS 4 and 5.

  • You became self-employed after 5 April 2020;
  • You did not submit your 2019-20 tax return by 2 March 2021;
  • Trading income is less than half of your total income e.g. income from a property investment or other employment is higher than your self-employment income;
  • You are a director of a limited company (you may be eligible for support under the furlough scheme);
  • You operate a Furnished Holiday Letting business;
  • You are operating a trade through a trust.

 

Information required for an SEISS claim

Claims should be made using the online claims portal.
In order to make a claim, individuals will need all of the following information:

  • Self-assessment Unique Taxpayer Reference (UTR) number;
  • National Insurance number;
  • Government Gateway user ID and password; and
  • Details of the bank account you want the grant to be paid into.

Agents can help with eligibility checks, but the actual claim via the portal must be made by the taxpayer personally.

If you submit a claim, you will be notified immediately if your claim is approved, how much you are eligible for and how this has been calculated, with payment following within six working days.

Payment will be a single instalment directly into your nominated bank account. If you do not agree with the amount HMRC has calculated, you should complete your claim anyway and ask HMRC for a review.

You must keep a record of the amount claimed, your claim reference number and evidence that your business has been adversely affected by coronavirus.

Full details of how SEISS 4 and 5 will be calculated have not yet been released and we will be posting updates as soon as information becomes available. Note that all claims for SEISS 1 to 3 are now closed.

If you need help to assess your eligibility and the potential claim amount for SEISS 4 and 5, contact us by emailing partners@rjp.co.uk.

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