If you are eligible for the fourth SEISS grant it is likely that HMRC have already contacted you by email, letter or text message to invite you to apply from late April 2021. The exact date on which an individual’s personal claims window opens will differ from person to person but the scheme will close for all applications on 1 June 2021.
The fourth grant covers the period from 1 February 2021 to 30 April 2021 and brings 2019/20 tax returns into account, both for eligibility and in calculation of the amount of the grant. This will open the scheme to some new applicants who started up in 2019/20. However, it must be noted that if you are no longer trading you will be ineligible to apply.
To be eligible for this grant you must:
• have submitted your 2019/20 tax return before 3 March 2021
• declare that you have traded in the 2020/21 tax year and intend to continue to trade in the 2021/2022 tax year
• declare that you have suffered a significant drop in trading profits due to COVID and
• reasonably believe that you will suffer a significant reduction in trading profits going forward.
Grant four will cover 80% of the three months’ average profits. As before, HMRC will work out this amount based on tax return information that they hold. If you would like us to review HMRC’s figures please get in touch.
Calculations will vary slightly where your profits have been affected by having a child or being a military reservist.
If you only started trading after 5 April 2019 you can expect some more rigorous identity and verification checks. These may include letters requiring response within a certain timeframe, phone calls and emails. If you have any concern over the veracity of communications received please get in touch with us, as the way in which HMRC are approaching verification checks is exposed to significant fraud risk. It is important not to dismiss such communications as being a scam, as there will be time deadlines in place and you may jeopardise your claim by failure to respond.
As with all previous SEISS grants, these are taxable and subject to class 4 NIC. They must be declared in the tax year in which they are received. These grants also need to be shown separately to business profits on your tax return.
It remains the case that agents are unable to make claims for this grant on behalf of their clients, however if necessary we can be on hand to support you while you make a claim.
The eligibility conditions for the fifth grant will be different. In this case the grant available to you will be calculated by reference both to historic profits and the percentage impact seen on your profits due to COVID. HMRC issued guidance on this grant which has since been retracted and thus the details of how this will be determined and calculated remain a matter for clarification.
The fifth grant is intended to ‘cover’ the 5 month period from May 2021 to September 2021, but the grant will only be calculated based on 80% of three months’ average trading profits. This echoes the situation last year where certain months did not appear to be accounted for by these grants.