Self-Employment Income Support Scheme – future grants confirmed
The UK Government has today announced that the Self-Employment Income Support Scheme (SEISS) will continue until September with a fourth and fifth grant.
The fourth and fifth grants will take into account submitted 2019-20 tax returns. This means your clients may be able to claim, even if they were not eligible for previous grants. Your clients must have submitted their 2019-20 tax returns by 2 March 2021 to be eligible for the fourth and fifth grants.
Fourth SEISS grant
The UK Government will pay a taxable grant which is calculated based on 80% of three months’ average trading profits, paid out in a single payment and capped at £7,500 in total. The value of the grant is based on an average of your client’s trading profits for up to four tax years between 2016 to 2020, where available.
The grant will be available to claim from late April. As with previous grants, trading profits must be no more than £50,000 and at least equal to non-trading income in order to claim the fourth SEISS grant.
Eligibility for the fourth SEISS grant will also depend on whether your client experienced a significant financial impact from coronavirus between February 2021 and April 2021.
As the calculation now takes into account the tax year 2019-20, your clients who previously claimed SEISS grants may receive grants that are higher or lower in value than any previous SEISS payments they received.
HMRC have moved quickly to ensure they have the information they need to check customers’ eligibility before applications are open, while also protecting the SEISS from fraud. Where we need to make further checks, they will write to customers and explain that they will call them to ask for proof of identity and evidence of trade. To make these calls, they will use the telephone number on the customer’s record. If this is their agent’s number, we will ask that you provide us with your client’s contact number as we need to speak to them directly. Thank you for supporting your clients with this process, which will help make sure HMRC can get support to people who need it.
Further details of the scheme can be found by searching ‘Self Employed Income Support Scheme’ on GOV.UK.
How your clients can claim the fourth SEISS grant
From mid-April, your clients will be given their personal claim date by HMRC which confirms the earliest date they can claim. HMRC are inviting customers to claim on different days to ensure the system is fast and easy to use.
The online claims service for the fourth grant will be live from late April. This is to allow HMRC time to process recently submitted 2019-20 Self Assessment tax returns.
Your clients must make their claim for the fourth grant between their personal claim date and 31 May 2021 at the latest.
Your clients will need to make an honest assessment that there has been a significant reduction in trading profits due to reduced demand or their inability to trade, and to keep appropriate records as evidence.
The UK Government has also announced that there will be a fifth and final SEISS grant covering May to September. The amount of the fifth grant will be determined by how much your clients’ turnover has been reduced.
The grant will be worth 80% of three months’ average trading profits, capped at £7,500, for those with a higher reduction in turnover (30% or more). For those with a lower reduction in turnover, of less than 30%, then the grant will be worth 30% of three months average trading profits.
Your clients will be able to claim the fifth grant from late July if they are eligible. Further details will be provided on the fifth grant in due course.
How will customers receive their personal claim date?
HMRC will contact your clients from mid-April by email, letter or SMS, depending on the information they have provided to HMRC previously.
What can customers do to prepare?
HMRC will send details of how to make a claim when we contact customers with their personal claim date.
In the meantime, to confirm eligibility and make a claim, customers should ensure they have the following to hand:
- National Insurance number
- Self Assessment Unique Taxpayer Reference (UTR)
- Government Gateway user ID and password
- bank account number and sort code.
Customers claiming SEISS for the first time may be asked additional questions to prove their identity. These customers should be ready to answer questions about the following documents, which we recommend they have to hand:
- UK passport
- credit file (such as loans, credit cards or mortgages)
- Self Assessment tax return (within the last 3 years)
- driving licence (DVLA UK or DVA NI)
- tax credit claim
- three most recent payslips.
During the first two weeks of a grant opening for claims, HMRC receive many calls to HMRC helplines from customers who cannot access the Government Gateway or have issues verifying their identity. HMRC would be grateful if you could support your clients in preparing the above documents so they’re ready to claim.
What support is there for those who are not eligible?
Those who are not eligible for SEISS may be eligible for other elements of the financial support provided by the UK Government. This includes Bounce Back Loans, tax deferrals, rental support, increased levels of Universal Credit, mortgage holidays, and other business support grants.
HMRC will contact your clients from mid-April by email, letter or SMS, depending on the information they have provided to us previously.
Protecting jobs and livelihoods
- An extension of the Coronavirus Job Support Scheme to September 2021 across the UK.
- An extension to the temporary cut in Stamp Duty Land Tax in England and Northern Ireland until September will support the housing market and protect and create jobs.
- A new mortgage guarantee scheme will enable all UK homebuyers secure a mortgage up to £600,000 with a 5% deposit.
- £5 billion for new Restart Grants – a one off cash grant of up to £18,000 for hospitality, accommodation, leisure, personal care and gym businesses in England.
- A new UK-wide Recovery Loan Scheme to make available loans between £25,001 and £10 million, and asset and invoice finance between £1,000 and £10 million, to help businesses of all sizes through the next stage of recovery.
- Extension of the Film & TV Production Restart scheme in the UK, with an additional £300 million to support theatres, museums and other cultural organisations in England through the Culture Recovery Fund.
- Six-month extension of the £20 per week Universal Credit uplift in Great Britain, with the Northern Ireland Executive receiving additional funding to match the increase. A one-off payment of £500 to eligible Working Tax Credit claimants across the UK.
- Extension to the VAT cut to 5% for hospitality, accommodation and attractions across the UK until the end of September, followed by a 12.5% rate for a further six months until 31 March 2022.
- 750,000 eligible businesses in the retail, hospitality and leisure sectors in England will benefit from business rates relief.
- Extension of the apprenticeship hiring incentive in England to September 2021 and an increase of payment to £3,000.
- £7 million for a new “flexi-job” apprenticeship programme in England, that will enable apprentices to work with a number of employers in one sector.
- Additional £126 million for 40,000 more traineeships in England, funding high quality work placements and training for 16-24 year olds in 2021/22 academic year.
- More than doubling the legal limit for single contactless payments, from £45 to £100
- £10 million to support veterans with mental health needs across the UK.
- £19 million to tackle domestic abuse in England and Wales, with funding for a network of ‘Respite Rooms’ to support homeless women and a programme to prevent reoffending.
- £90 million funding to support our government-sponsored national museums in England due to the financial impact of Covid-19.
- £300 million for major spectator sports, supporting clubs and governing bodies in England as fans begin to return to stadia.
- Small and medium-sized employers in the UK will continue to be able to reclaim up to two weeks of eligible Statutory Sick Pay (SSP) costs per employee from the Government.
- To further support the cashflow of businesses, the government is extending the loss carry back rules worth up to £760,000 per company.
Strengthening the public finances over several years
- Maintaining the income tax Personal Allowance and higher rate threshold from April 2022 until April 2026.
- To balance the need to raise revenue with the objective of having an internationally competitive tax system, the rate of Corporation Tax will increase to 25%, which will remain the lowest rate in the G7. In order to support the recovery, the increase will not take effect until 2023. Businesses with profits of £50,000 or less, around 70% of actively trading companies, will continue to be taxed at 19% and a taper above £50,000 will be introduced so that only businesses with profits greater than £250,000 will be taxed at the full 25% rate.
- Maintaining inheritance tax thresholds at their current levels until April 2026.
- Fuel duty will be frozen for the 11th consecutive year.
- Alcohol duties will be frozen across the board for the second year running saving drinkers £1.7 billion.
- Capping the amount of SME payable R&D tax credit that a business can receive in any one year at £20,000 (plus three times the company’s total PAYE and NICs liability).
- Maintaining the Lifetime Allowance at its current level of £1,073,100 until April 2026.
- The adult ISA annual subscription limit for 2021-22 will remain unchanged at £20,000.
An investment-led recovery
- Beginning April 2021, the new super-deduction will cut companies’ tax bill by 25p for every pound they invest in new equipment. This is worth around £25 billion to UK companies over the two-year period the super-deduction will be in full effect.
- Eight new English Freeports will be based in East Midlands Airport, Felixstowe & Harwich, Humber, Liverpool City Region, Plymouth, Solent, Thames and Teesside.
- The £375 million UK-wide ‘Future Fund: Breakthrough’ will invest in highly innovative companies such as those working in life sciences, quantum computing, or clean tech, that are aiming to raise at least £20 million of funding.
- Reforms to the immigration system will help ambitious UK businesses attract the brightest and best international talent.
- A new Help to Grow scheme to offer up to 130,000 companies across the UK a digital and management boost.
- £2.8 million to support a UK and Ireland bid to host the 2030 World Cup and £25 million investment in UK grassroots sports, enough for around 700 new pitches.
- Launching a review of Research & Development tax reliefs to make sure the UK remains a competitive location for cutting-edge research.
- £20 million to fund a UK-wide competition to develop floating offshore wind demonstrators and help support the government’s aim to generate enough electricity from offshore wind to power every home by 2030.
- £68 million to fund a UK-wide competition to deliver first-of-a-kind long-duration energy storage prototypes that will reduce the cost of net zero by storing excess low carbon energy over longer periods.
- £4 million for a biomass feedstocks programme in the UK to identify ways to increase the production of green energy crops and forest products that can be used for energy.
- Over £1 billion funding for a further 45 towns in England through the Towns Fund, supporting their long-term economic and social regeneration as well as their immediate recovery from the impacts of COVID-19.
- £135 million to progress A66 Trans-Pennine upgrade.
- £28 million to fund the Queen’s Platinum Jubilee celebrations in 2022, delivering a major celebration for the UK.
- Plans for at least £15 billion of green gilt issuance in the coming financial year, to help finance critical projects to tackle climate change and other environmental challenges, fund important infrastructure investment, and create green jobs across the UK.
- £150 million Community Ownership Fund will allow communities across the UK to invest to protect the assets that matter most to them such as pubs, theatres, shops, or local sports clubs.
- £18.8 million to transform local cultural projects in Hartlepool, Carlisle, Wakefield and Yeovil.
- Publication of the prospectus for the £4.8 billion UK-wide Levelling Up Fund, providing guidance for local areas on how to submit bids for the first round of funding starting in 21-22.