Last week, Rishi Sunak used the Spring Budget to announce his plan for economic recovery. As well as plans for investing in the future economy, he also outlined how he will continue to support businesses and the self-employed through the next stage of the COVID-19 pandemic.
The good news is there will be a fourth and fifth Self-Employment Income Support (SEISS) grant, which for the first time will be open to the newly self-employed.
We take a look at what this means, who it affects and how to apply.
What is the Self-Employment Income Support Scheme?
The SEISS scheme was originally announced to support self-employed people, including freelancers and sole traders, whose businesses have been impacted by coronavirus. To date, there have been three SEISS grants which have been worth 80% of someone’s average monthly trading profit, for a three-month period. Worth up to £7,500 in total, so far, the scheme has already supported 2.7 million people.
The Fourth Self-Employment Income Support Scheme grant
The fourth grant will cover the period from February 2021 to April 2021 and will also be worth 80% of three months’ average trading profits. As before, it will be paid out in a single instalment and capped at £7,500 in total.
Claims can be made from late April, and currently it looks as though the eligibility criteria will stay the same as for the third grant, namely:
- You must currently be trading
- Your trade must have suffered as a result of Covid-19, either by reduced activity, capacity or demand
- You must reasonably believe you will suffer a significant reduction in trading profits
- You must be planning to continue trading beyond the end of the support.
More information will be made available on the fourth grant shortly.
How this affects the newly self-employed
For the previous grants, the newly self-employed didn’t qualify as they hadn’t all filed a 2019/20 tax return. Since the tax return deadline has now passed, as long as you filed your tax return to HMRC by midnight on 2nd March 2021, you are eligible for this grant.
The government estimates that this will support an additional 600,000 people who were previously excluded.
Fifth and final SEISS Grant
The fifth and final SEISS grant will cover the period from May 2021 to September 2021. This grant will be determined by a new turnover test.
If your turnover has fallen by 30% or more, you will continue to receive the full grant worth 80% of three months’ average trading profits, capped at £7,500.
If your turnover has fallen by less than 30% you will receive a 30% grant, capped at £2,850.
Further details will be published on the fifth grant in due course but it’s expected you will be able to claim from late July 2021.
How do you make a claim?
To apply, visit the HMRC website and complete their form. You will need your:
- Self-Assessment Unique Taxpayer Reference (UTR)
- National Insurance number
- Government Gateway user ID and password
- UK bank details including account number, sort code, name on the account and address linked to the account.
As with all the SEISS grants, you must make the claim yourself. If we do it on your behalf, it will trigger a fraud alert, which will delay your payment.
Will the grants need to be repaid?
No. As before these grants do not need to be repaid but will be subject to Income Tax and self-employed National Insurance.
And, if you do get the grant you can continue to work or take on other employment or voluntary work.
Offering support to the self-employed
If you are newly self-employed and not sure what support is available to you during these challenging times, please get in touch. We love nothing more than helping businesses thrive, so will happily advise you on any grants and financial support that will help your business keep going.
