On Budget Day, the Chancellor announced more details of the fourth SEISS grant, which will be set at 80% of three months’ average trading profits, paid out in a single instalment, capped at £7,500 and will be available from late April 2021 until 31 May 2021.
The fourth grant will take into account 2019/20 returns and will be extended to those who became self-employed in tax year 2019/20. The rest of the eligibility criteria remain unchanged.
Eligibility for the scheme will now be based on submission of the 2019/20 return and this may affect the amount of the fourth grant, which could be higher or lower than previous grants.
Initially, eligibility will consider the 2019/20 return on which trading profits must be no more than £50,000 and at least equal to non-trading income. If there is no eligibility at this stage, HMRC will then look at 2016/17, 2017/18, 2018/19 and 2019/20.
In addition, the individual must also traded in both 2019/20 (and submitted the return by 2 March 2021) and 2020/21 and must either be currently trading but are impacted by reduced demand due to coronavirus or have been trading but are temporarily unable to do so due to coronavirus.
The individual will have to declare that they intend to continue to trade and reasonably believe there will be a significant reduction in their trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus.
A fifth and final grant covering May to September will be available from late July and will be determined by how much the turnover has been reduced in 2020/21. The fifth grant will be worth:
- 80% of three months’ average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more; or
- 30% of three 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.