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Budget 2021: Further support for the self-employed announced

by | Mar 5, 2021 | Covid, Owner managed business, Start ups

Self Employed

The Chancellor on 3rd March confirmed further support for the self-employed with a fourth and fifth grant paid out by the Coronavirus Self Employed Income Support Scheme (SEISS).

Fourth Grant

The fourth grant covers the three-month period from February until the end of April and is worth up to 80% of 3 months average trading profits, paid out in a single payment capped at £7,500. The fourth grant will take into account 2019 to 2020 tax returns and will be open to those who became self-employed in tax year 2019 to 2020. Your eligibility for the scheme will now be based on your submitted 2019 to 2020 tax return. First time claimants are able to apply.

Eligibility

To be eligible for the fourth grant you must be a self-employed individual or a member of a partnership. To work out eligibility first look at your 2019 to 2020 Self Assessment tax return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income.

You must also have traded in both tax years:

  • 2019 to 2020 and submitted your tax return by 2 March 2021
  • 2020 to 2021

You 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

You must also declare that:

  • you intend to continue to trade
  • you reasonably believe there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus

If you’re not eligible based on your 2019 to 2020 Self-Assessment tax return, then trading profits in tax years 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020 will be considered.

How to claim

The online claims service for the fourth grant will be available from late April 2021 until 31 May 2021. If you are eligible, HMRC will contact you in mid-April to give you your personal claim date. This will be the date that you can make your claim from. There will be more guidance about the fourth grant in due course.

Fifth grant

The UK government has also announced that there will be a fifth and final grant covering May to September. You will be able to claim from late July if you are eligible for the fifth grant. The amount of the fifth grant will be determined by how much your turnover has been reduced in the year April 2020 to April 2021.

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%

Further details will be provided on the fifth grant in due course.

 Caution

You can access this scheme only through GOV.UK. If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.

Disclaimer

This information is based on information available as of 4 March 2021.  Further information and guidance will be made available as it is released.

For further information go to

Self Employed Income Support Scheme (SEISS)