SEISS grants four and five

The most recent government news announced by the Chancellor in the last Budget confirmed details of the next steps in the self-employment income support scheme – SEISS grants four and five.

Fourth SEISS Grant

The fourth SEISS grant covers February to April 2021. It has been set at 80% of three months’ average trading profits and is capped at £7,500.  Average trading profits cover the four years 2016/17 – 2019/20, where available.  Your trading profits must be no more than £50,000 and at least equal to or more than your non-trading income.

If you have not already been contacted by HMRC, you can make a claim on the gov.uk website – “Check if you can claim a grant through the Self-Employment Income Support scheme”

Fifth SEISS Grant

The fifth grant covers May to September 2021.  It has been set at 80% of three months’ average trading profits capped at £7,500 for those whose turnover has reduced by 30% or more. Those with a turnover reduction of less than 30% will receive a grant based on 30% of three months’ average trading profits, capped at £2,850. Average trading profits will be calculated as for SEISS 4.

Details of how the turnover test will work may not be available for some time, but the Tax Faculty understands that the comparison is likely to be tax year 2020/21 compared with 2019/20 (this may need to be varied where taxpayers do not prepare accounts to 31 March or 5 April).

The grants are based on three months’ trading profits despite covering a five-month period. HMRC has indicated that this approach is intended to tailor support as the economy opens up. The SEISS applications portal is expected to open for the fifth grant in late July.

Please also note that SEISS Grants are all subject to income tax and national insurance and all qualify as Net Relevant Earnings for pension purposes’’