If you are self-employed, HMRC should be contacting you about round 4 of the Self-Employment Income Support Scheme (SEISS). This covers the period from 1 February to 30 April 2021. Claims will be possible from late April up until 1 June 2021.

Who is eligible?
This grant is only available to those who operate as sole traders or as members of a partnership. You must have traded in the 2019/20 tax year, and submitted your return for that year no later than 2 March 2021. Your business must have continued from that time up to now and you must have an intention to continue to trade. As in previous rounds of the scheme, your reported self-employed profits from previous years must be no more than £50,000 and at least 50% of your total income.

As the grant is intended to cover lost income, you must also either be temporarily unable to trade or have a reduced income as a result of the coronavirus. Claimants must have a reasonable belief that their trading profits will be lower as a result. In making this calculation, any other coronavirus support , such as the rates grant, should be ignored.

This last requirement is stricter than for previous rounds. As the lockdown eases, it is also likely that claims for round 4 will be subject to greater scrutiny. If you do claim, it is important to keep clear records showing why you thought you would have lower profits. 

PICTURE:  Andrew Neel/Unsplash

Amount due
Payment for all three months covered will be made as a single lump sum.The amount due will be 80% of average monthly profits, based on filed figures, capped at £7,500 in total. This figure may be different to previous SEISS claims, as the 2019/20 tax return figures will be included in the calcluations for the first time. 

Taxation
Because it is treated as self-employed income for tax purposes, grants will be subject to tax and Class 4 National Insurance. Whilst most of the period the grant covers is in the 2020/21 tax year, it will be recorded on the 2021/22 tax return as the year of receipt. There will be a separate box on the tax return for recording this income. 

Having a new child
If a self-employed individual had a new child in the 2019/20 tax year, this may have reduced their self-employed activity. Because such a reduction might make that individual ineligible for the scheme, a special exception is possible for having a new child. 

The following counts as having a new child for this purpose.
• being pregnant
• giving birth (including a stillbirth after more than 24 weeks of pregnancy) and the 26 weeks after giving birth
• caring for a child within 12 months of birth if you have parental responsibility
• caring for a child within 12 months of adoption placement.

Anyone seeking to make a claim on this basis needs to contact HMRC on 0800 024 1222 first to check eligibility.


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