The 4th Self-Employment Income Support Scheme Grant

The 4th SEISS grant (‘Self-Employment Income Support Scheme’ Grant) allows self-employed people, whose business and income have been affected by the pandemic, to claim money from the Government, even if you are new to self-employment.

Who Can Claim for the 4th SEISS Grant?

You must be a self-employed individual or a member of a partnership.

You cannot claim the grant if you trade through a limited company or a trust.

Those of you who made a claim for the third grant must have seen your business have a new or continuing impact from coronavirus between 1 November 2020 and 29 January 2021, which you must have reasonably believed would cause a significant reduction to your profits.

You also have to declare that you would continue to trade, or that you were previously trading but are no longer able, due to the pandemic.

Lastly, you have to declare that your trading profits are no more than £50,000 and at least equal to your non-trading income.

Details of the 4th SEISS Grant

The 4th SEISS grant will be available to claim from April (specific date currently unspecified*) and will cover February, March and April.

If you meet the criteria you can claim 80 percent of your average monthly profits which is capped at £2,500. Please note this £2,500 cap is on a per month basis, this is not the a cap on the total amount of 3 months profit, that is capped separately at a maximum of £7,500.

More than half your income must come from self-employment.

You will receive 3 months worth of the Grant in one single payment.

How the 4th SEISS Grant is Calculated

It has now been confirmed by HMRC that the 4th SEISS grant will be calculated much alike the first three grants, except this grant will now also include your 2019/2020 tax return.

This means that your grant will be based on the average profits from your 2016/2017, 2017/2018, 2018/2019, 2019/2020 tax returns. As before, if you haven’t been trading that long then they will simply use an average of as many tax returns as you have currently submitted. So if you’ve only submitted your 2019/2020 tax return, your average will be solely based on the profit in that tax return. If you have only ever filed your 2018/2019 and 2019/2020 tax returns, then the amount will be based on the average of those two tax returns…and so on!

How to calculate your grant:

If you have only filed 2019/2020 tax return

1. Divide your total profit by 12
2. Multiply that answer by 3
3. Divide that answer by 100
4. Multiply that answer by 80

If you have only filed 2018/2019 and 2019/2020 tax returns

1. Add up your profits from both tax returns
2. Divide that total by 24
3. Multiply that answer by 3
4. Divide that answer by 100
5. Multiply that answer by 80

If you have filed your 2017/2018, 2018/2019 and 2019/2020 tax returns

1. Add up your profits from all three tax returns
2. Divide that total by 36
3. Multiply that answer by 3
4. Divide that answer by 100
5. Multiply that answer by 80

If you have filed all 2016/2017, 2017/2018, 2018/2019 and 2019/2020 tax returns

1. Add up your profits from all four tax returns
2. Divide that total by 48
3. Multiply that answer by 3
4. Divide that answer by 100
5. Multiply that answer by 80

Remember, this grant is taxable income so it will have to be included as income on your tax return.

However, this 4th grant unfortunately ‘pays’ you for February, March and April (April of course being when the new tax year begins) so you’ll need to divide the total amount of the grant payment into 3. This gives you three-thirds, you’ll then need to include two-thirds of that amount in your 2020/2021 tax return, and include the last one-third in your 2021/2022 tax return.

Also for reference, the 5th and final SEISS grant will then all need to be included on your 2021/22 tax return.

How do you apply for the 4th SEISS Grant?

To apply, you will need your:

• Self-Assessment Unique Taxpayer Reference (UTR)
• National Insurance number
• Government Gateway user ID and password
• UK bank details including account number, sort code, name on the account and address linked to the account
• Only provide bank account details where a BACS payment can be accepted
• You may also need to answer questions about your passport, driving licence or information held on your credit file.
• You must make the claim yourself. A Tax Agent, Accountant or Adviser cannot claim on your behalf as this will trigger a fraud alert, which will delay your payment.

Are you Newly Self-Employed?

If you are new to self-employed you may be eligible to claim Government support provided you have filed a tax return by midnight on 28 February 2021

So those of you who have only just become self-employed last year, you can now claim the fourth and fifth grants. This is because the Government is now allowing you to submit your 2019-2020 (and 2020-2021 for the 5th grant) self-assessment tax returns as evidence of your earnings.

Applicants must also be able to prove that they plan to continue trading, or providing a service, beyond the end of the support, which is expected to end in April.

*Correct at the time of writing