In the latest Budget, the Government announced details of who can claim the fourth SEISS grant and the level that claims can will be paid out at. 

Some significant changes have been introduced for the fourth grant, please take a moment to consider them:

 

  1. If You Already Qualified For The Third Grant
  • The fourth SEISS grant will be set at 80% of 3 months’ average trading profits, paid out in a single instalment, capped at £7,500;
  • Your continued eligibility for the scheme will now be based on your submitted 2019 to 2020 tax return;
  • This may affect the amount of the fourth grant which could be higher or lower than previous grants you may have received.
  • You must still continue to meet all historic criteria set under the Scheme.

 

  1. I Have Never Been Eligible For The SEISS Grant Before – Could I Be Now?
  • The fourth grant will take into account 2019 to 2020 tax returns and will be open to those who became self-employed in tax year 2019 to 2020;
  • To be eligible for the fourth grant you must be a self-employed individual or a member of a partnership;
  • You must also have traded in both tax years 2019/20 (and have submitted a tax return by 2nd March 2021) and also in the current tax year 2020/21;
  • Finally you must also be able to declare that you
    • intend to continue to trade; and
    • you reasonably believe there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus.
  • PLEASE ENSURE YOU READ through to the end of this update – it is ESSENTIAL READING for new claimants in particular to ensure that you are included in the next tranche of payouts by Government.

 

  1. What Is The Eligibility Period?
  • The eligibility period for the fourth grant is 1 February 2020 to 30th April 2021;

 

  1. When Can I Make A Claim?
  • The online claims service for the fourth grant will be available from late April 2021 until 31 May 2021;
  • If you are eligible, HMRC will contact you in mid-April to give you your personal claim date;
  • This will be the date that you can make your claim from; more details will be published.

 

  1. Do I Need To Report SEISS Grants On My Future Tax Returns?
  • YES, SEISS grants are all taxable.

 

  1. Is There A Fifth Grant?
  • The Government has announced that there will be a fifth and final grant, covering the period May to September 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%
  • You will be able to claim from late July if you are eligible, details to follow later in the year.

 

  1. New Claimants – The Qualification Process
  • Taxpayers that commenced trade in the 2019/20 tax year are now eligible to make a claim under the Self Employed Income Support Scheme.
  • The Government has set stringent steps to be followed to prevent fraud – unfortunately, the steps leave you open to receiving fraudulent calls so please read and take note of the what follows.
    • With this particular grant HMRC will be writing to you asking you to confirm your identity and prove that you have been trading, before the 4th SEISS grant can be claimed (covering the period Feb to Apr 21) toward the end of April 21;
    • The Revenue have advised that only taxpayers that started trading as self-employed after 5th April 2019 will receive this verification letter, and that only part of that group will be contacted in this way.
  • Once contacted, there is a lengthy process to be undertaken which must be followed. If you are in doubt about the legitimacy of the process or correspondence that you are receiving please contact Tracy tracyc@barrons-bds.com
    • Step 1: Receipt of HMRC’s letter

You should receive, read and respond to the HMRC letter which should arrive between 10 March and mid-April.

  • Step 2: Answer a call from HMRC

Up to two weeks after the letter is sent, an HMRC officer will call the contact number detailed on your 2019/20 tax return.

If the agent’s number (i.e. Barrons) was shown as the contact point HMRC will ask the agent to pass on their client’s telephone number. We would appreciate your forward confirmation to Tracy that we are authorised to release your personal data.

When HMRC call you, this will, unfortunately, be shown as coming from an “unknown number”. When receiving this call, please seek to identify the caller by asking them to provide you with the last 4 digits of your Unique Tax Reference number – there are going to be scam calls the way Government has set up trying to avoid fraud appertaining to them, unfortunately we anticipate many will be targets for being defrauded themselves

HMRC will make only three attempts to call between 8am and 5.30pm. If none of those three attempts are successful you will have failed the pre-verification.

  • Step 3: Supply email address

When you speak to HMRC you will need to confirm or supply your email address, and you must also agree to receive a link to a Dropbox account to that email address.

  • Step 4: Find email from HMRC

You will need to open the email from HMRC that includes the Dropbox link, please monitor your junk folder, as the communication may well file to this folder.

  • Step 5: Digital copies

You will need to make digital copies of a form of your ID (e.g. photo-card driving licence, or current passport) plus three months of your UK business bank statements from 2019/20 (from 6th April 19 to 5th April 2020). This information is needed to demonstrate that the new business has been active in 2019/20.

If the business has been run without a UK bank account HMRC will accept other documents, but you must agree what is acceptable in your call with HMRC.

  • Step 6: Upload documents

You will only have two days to upload the digital copies of your ID and bank documents to the HMRC Dropbox. After two days you will fail the pre-verification.

  • Step 7: Apply for the grant

The online portal to apply for the next SEISS grant will open in late April,

  • We are sorry to advise that tax agents cannot claim SEISS grants on behalf of their clients but we will help however we can.  

 

Barrons has put together a helpful guide to running your business during the coronavirus crisis.