FOURTH SEISS: Staggered application process for struggling self-employed workers now live
The fourth Self-Employment Income Support Scheme (SEISS) grant has now opened its doors to eligible workers struggling as a result of the coronavirus pandemic.
As of yesterday, some self-employed workers were allowed to apply for their SEISS grant depending on their application start date provided by HMRC. Application start dates have been staggered throughout the next seven days.
For taxi drivers and other eligible self-employed workers throughout the UK, the Government's financial SEISS package has been a lifeline for both individual workers and their families.
The fourth SEISS grant will provide a taxable grant calculated at 80% of 3 months’ average trading profits. The grant will be paid out in a single instalment and capped at £7,500 in total.
Applications for the much anticipated fourth SEISS grant must be made on or before 1 June 2021.
Those eligible for the grant should now have been contacted directly by HMRC and provided with a personal claim date. Eligible workers will then be able to submit their claims for the fourth grant from the date provided by HMRC.
In previous application rounds, HMRC has been able to turn around SEISS claims within just six working days from a claim being successfully submitted.
To be eligible for the fourth grant, workers must be a self-employed individual or a member of a partnership. They cannot claim the grant if they trade through a limited company or a trust.
All eligible claimants must have traded in both tax years:
2019 to 2020 and submitted your tax return on or before 2 March 2021
2020 to 2021.
Workers must also be either currently trading, but remain impacted by reduced demand due to coronavirus, or have been trading, but are temporarily unable to do so due to coronavirus.
To be eligible for the fourth grant they must also crucially declare that they intend to continue to trade and reasonably believe there will be a significant reduction in their trading profits.
The fourth grant is calculated much like previous SEISS grants at 80% of 3 months’ average trading profits. It will be paid out in a single instalment and capped at £7,500 in total. How much a worker receives will depend on their average trading profits.
HMRC will work out your average trading profits using up to 4 years’ of submitted tax returns. This may affect the amount claimants get which could be higher or lower than previous grants.
HMRC will take into account trading profits from the 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020 tax years. For those with a gap in the years they have traded, HMRC will only use the most recent returns after the gap to work out the grant.
Trading profits must be no more than £50,000 and at least equal to or more than the non-trading income.
HMRC have also stated that in order to claim the fourth grant, workers must reasonably believe that they will suffer a significant reduction in trading profits, due to reduced business activity, capacity, demand or inability to trade due to coronavirus between 1 February 2021 and 30 April 2021. HMRC will ask claimants to keep evidence that shows how the business has been impacted by coronavirus resulting in less business activity than otherwise expected.
HMRC says they expect claimants ‘to make an honest assessment about whether you reasonably believe your business will have a significant reduction in profits’.
There are some circumstances that can affect eligibility such as if a worker returned their tax return late for instance. Find out more information on how circumstances might affect eligibility.
According to a HMRC spokesperson talking to TaxiPoint, there is also good news for Uber drivers. Individuals that have already claimed one (or more) of the first three SEISS grants - and met the eligibility criteria at the time they made their claim - can keep the grant(s). This is irrespective of whether their employment status retrospectively changes for those periods as per the recent landmark workers’ rights win experienced by Uber drivers.
HMRC do however state that it is up to the claimant to consider whether they meet the eligibility criteria for SEISS. Whether they are self-employed for tax purposes will depend on the terms of their contract of engagement.
The Chancellor Rishi Sunak also announced a fifth and final SEISS grant will be made available to help those struggling. The UK Government said the final grant will cover May to September.
Eligible self-employed workers will be able to claim from late July and the amount of the fifth grant will be determined by how much the claimant's 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.
