That’s a mouthful! We have done our best to keep this as concise as possible but for the full debrief click here;
Can you claim?
For the fourth grant you must be listed as self-employed and cannot claim the grant through a limited company.
According to the HMRC you must have traded in both tax years, 2019 to 2020 and 2020 to 2021 and must be currently trading and have significant losses due to coronavirus.
You must show that you intend to keep working and believe there will be a decent loss in profits, this can be dues to:
“business activity, capacity, demand or inability to trade due to coronavirus between 1 February 2021 and 30 April 2021”
You need evidence that shows you have been impacted by coronavirus more so than before.
“HMRC expects you to make an honest assessment about whether you reasonably believe your business will have a significant reduction in profits”
Before you make a claim, you must decide if the impact on your business between 1 February 2021 and 30 April 2021 will cause a significant reduction in your trading profits for the tax year you report them in.
HMRC cannot make this decision for you because your individual and wider business circumstances will need to be considered when deciding whether the reduction is significant.
You should wait until you have a reasonable belief that your trading profits are going to be significantly reduced, before you make your claim.
How HMRC works out your eligibility based on your tax returns
To be eligible for the fourth grant, HMRC will look at the 2019 to 2020 Self-Assessment tax return. Trading profits will be no more than £50,000.
If based on the 2019 to 2020 Self-Assessment you aren’t eligible, HMRC will then look at the tax years 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020.
How different circumstances affect the scheme
There are some circumstances that can affect your eligibility such as if:
• your return is late, amended or under enquiry
• you’re a member of a partnership
• you had a new child
• you have loans covered by the loan charge provisions
• you claim averaging relief
• you’re a military reservist
• you’re non-resident or chose the remittance basis
Maternity Allowance will not affect your eligibility for the grant.
How much you’ll get.
“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”
Find out more information on how HMRC work out your trading profits.
How the grant is treated
The grant is subject to Income Tax and self-employed National Insurance Contributions. It must be reported on your 2021 to 2022 Self-Assessment tax return.
The grant also counts towards your annual allowance for pension contributions.
SEISS grants are not counted as ‘access to public funds’, and you can claim the grant on all categories of work visa.
There will be a fifth grant covering May 2021 to September 2021.
You can contact HMRC if you cannot get the help you need online.