2021 Budget

This is the sixth in our series of seven blogs regarding the 2021 Budget delivered by the Chancellor, Rishi Sunak on 3 March 2021 and covers the extension of the Self Employed Income Support Scheme (SEISS).

Self Employed Income Support Scheme (SEISS)

During the Coronavirus (Covid-19) pandemic there have been three Self Employed Income Support Scheme (SEISS) grants made available covering the period up to 29 January 2021.  Note that no further claims can be made for these three earlier grants.

The UK Government announced in November 2020 that there would be a fourth grant to cover the period from 1 February 2021 to 30 April 2021. The amount of the grant was announced in the 2021 Budget.

A further, fifth grant, to cover the period from 1 May 2021 to 30 September 2021 was also announced in the 2021 Budget.

The Scheme applies to the whole of the UK.

Fourth SEISS Grant

When can I claim the grant?

• The HMRC portal for the fourth SEISS grant will open from late April 2021 until 31 May 2021

• If you are eligible, HMRC will contact you in mid-April 2021 to give you your personal claim date. This will be the date that you can make your claim from.

How much is the grant?

• The grant will be set as 80% of 3 months’ average trading profits, paid out in a single instalment, capped at £7,500

• The fourth grant will take into account the information reported on your 2020 tax return and will be open to those who became self-employed in the tax year 2019 to 2020

Previous grants were based on the information reported on the 2019 tax return.

Who is eligible to claim?

• To be eligible for the fourth grant you must be a self-employed individual or a member of a partnership

• Your eligibility for the scheme will now be based on your submitted 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.

• To work out your eligibility HMRC will first look at your 2020 tax return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income.

• If you are not eligible based on your 2020 tax return, HMRC will then look at your 2017, 2018 and 2019 returns

• You must have traded in both tax years:

2019/2020 and submitted your tax return by 2 March 2021

2020/2021

• You 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

• You must also 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

HMRC will announce more details about the fourth grant in due course.

Fifth SEISS Grant

• The fifth and final SEISS grant will cover May 2021 to September 2021

• If you are eligible you will be able to claim the grant from late July 2021

• The amount of the fifth grant will be determined by how much your turnover has been reduced in the year April 2020 to April 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

or

30% of 3 months’ average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%

Again, HMRC will publish further details about the fifth SEISS grant in due course.

Links to other 6 Budget Blogs

https://jsca.co.uk/budget-2021/

Income Tax and National Insurance

https://jsca.co.uk/budget-2021-2/

Capital Gains, Inheritance Tax, Pensions, ISAs, 95% Mortgage Guarantee and Wealth Tax

https://jsca.co.uk/budget-2021-3/

Corporation Tax, Super-deduction and Special Rate Allowance, Extended Loss Carry Back for Businesses, New Recovery Loan Scheme, Preventing abuse of Research and Development (R&D) and Reform of Self-Assessment Penalties and Interest

https://jsca.co.uk/budget-2021-4/

VAT and Duties

https://jsca.co.uk/budget-2021-5/

SDLT and LBTT, Licensing in Scotland, Freeports, Levelling Up Fund Prospectus Launch, Green Initiatives, Investment in HMRC and Funding for Scotland

https://jsca.co.uk/budget-2021-7/

Coronavirus Job Retention Scheme (CJRS)

The information in this blog provides only an overview of HMRC guidance and legislation in force at the date of publication and no action should be taken without consulting the detailed HMRC guidance and legislation or seeking professional advice.  Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this blog can be accepted by the firm.

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