Self-Employment Support Scheme

It was confirmed during the Budget, that the earlier proposed 4^th SEISS instalment would now be paid out, along with a fifth and final instalment later in 2021, to coincide with the extension to the furlough scheme.

Fourth Grant Instalment

Once again, a grant equal to 80% of 3 months’ average trading profits, capped at £7,500, will be available to eligible individuals.  This fourth instalment covers the 3-month period 1^st February 2021 to 30 April 2021.

There is quite a significant change to eligibility criteria for the fourth grant, with eligibility now based on the 2019/20 tax year or the four years covering 2016/17 through to 2019/20.  This now brings in individuals who became newly self-employed in tax year 2019/20 and who previously did not qualify for the first three instalments of the scheme, provided they have filed self-assessment tax returns for 2019/20 tax year.

The value of the grant will now also be based on average trading profits over the last four tax years ending 2019/20, meaning this instalment could be higher or lower than previous grants received.

Eligibility

• Individuals must be self-employed or members of a partnership.
• Trading profits must be no more than £50,000 and must be at least 50% of total income in tax year 2019/20.
• If not eligible based on tax year 2019/20, then HMRC will look at the average of the last 4 years, 2016/17, 2017/18, 2018/19 and 2019/20 and apply the same criteria against these figures.
• Individuals must have traded in the tax year 2019/20 and filed a self-assessment tax return by 2^nd March 2021.  They should also still be trading in the current tax year 2020/21.
• Individuals will be required to declare that they intend to continue to trade and that they reasonably expect a significant reduction in their trading profits due to reduced activity, capacity, demand, or restrictions placed on their trading ability due to COVID-19.

The online claims process will be available from late April through to 31 May 2021.  As per previous claims, HMRC will contact eligible individuals to provide them with claim dates to login to their personal tax accounts and process their claim.

Fifth Grant Instalment

The fifth and final instalment will cover the period 1 May 2021 to 30 September 2021.  The same eligibility criteria as above, will apply to the fifth instalment also.

However, the grant calculation will change somewhat, with the grant award being determined by how much an individual’s turnover has been reduced in the tax year 2020/21

• For individuals, whose turnover (not profits) has reduced by greater than 30%, a grant of 80% of 3 months’ average trading profits, capped at £7,500 will be available.
• For individuals, whose turnover has reduced by less than 30%, a grant of 30% of 3 months’ average trading profits, capped at £2,850 will be available.

More details will be released on this grant in due course, with the online claims process for this grant expected to begin from late July.