Updated 3rd March 2021
The Budget announcements confirmed that the fourth SEISS grant will be set at 80% of 3 months’ average trading profits, paid out in a single instalment, capped at £7,500. The fourth grant will take into account 2019/20 tax returns and will be open to those taxpayers who became self-employed during the 2019/20 tax year. The previous eligibility criteria remains unchanged.
Eligibility for the fourth grant will now be based on an individual’s submitted 2019/20 tax return. This may affect the amount of the fourth grant, which could be higher or lower than previous grants received.
Who can claim
To be eligible for the fourth grant an individual must be a self-employed individual or a member of a partnership.
To work out an individual’s eligibility HMRC will first look at the 2019/20 self assessment tax return. An individual’s trading profits must be no more than £50,000 and at least equal to their other non-trading income.
If an individual is not eligible based on the 2019/20 self assessment tax return, HMRC will then review the years 2016/17, 2017/18, 2018/19 and 2019/20.
An individual must also have traded in both tax years:
- 2019/20 and submitted their tax return by 2 March 2021
An individual must either:
- be currently trading but are impacted by reduced demand due to coronavirus
- have been trading but are temporarily unable to do so due to coronavirus
An individual must also declare that:
- they intend to continue to trade
- they reasonably believe there will be a significant reduction in their trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus
What the fourth grant covers
The fourth grant will provide a taxable grant calculated at 80% of 3 months’ average trading profits. The fourth grant will be paid out in a single instalment and capped at £7,500 in total.
How to claim
To allow HMRC to process recently submitted 2019/20 self assessment tax returns, the online portal for the SEISS fourth grant applications will be available from late April 2021 until 31 May 2021.
HMRC will make contact with eligible individuals in mid-April 2021 to provide them with a personal claim date. This will be the date that an individual can make their claim from.
HMRC will issue further guidance about the fourth grant in due course.
The Government has announced that there will be a fifth and final grant covering the period from 1 May 2021 to 30 September 2021.
Claims for the fifth grant can be made from late July 2021.
The amount of the fifth grant will be determined by how much an individual’s turnover has been reduced in the year 2020/21.
The fifth grant will be worth:
- 80% of 3 months’ average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more
- 30% of 3 months’ average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%
HMRC will provide further details on the fifth grant in due course.