Updated: Mar 10, 2021
The Chancellor has told self-employed workers there is little chance of the fourth SEISS grant application process opening sooner than the planned mid-April date.
Martin Lewis, a consumer expert and TV presenter, probed the Chancellor of the Exchequer Rishi Sunak on details surrounding the eagerly awaited fourth and fifth Self-Employed Income Support Scheme (SEISS) grants.
Details of the much anticipated fourth SEISS grant were released by the Chancellor at last week’s Budget. Self-employed workers will have to wait until April to claim their fourth vital support grant.
As part of the fourth payment the UK Government will provide self-employed workers 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 trading profits for up to four tax years between 2016 to 2020, where available.
The grant will be available to claim by 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.
According to HMRC sources, eligibility for the fourth SEISS grant will depend on whether the potential claimant experienced a significant financial impact from coronavirus between February 2021 and April 2021.
For this period, workers 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. If a worker wished to make a claim, they will need to keep appropriate records as evidence.
HMRC will contact potential self-employed claimants from mid-April if they believe they may be eligible for the fourth SEISS grant to tell them how they can claim. Workers will be provided with their own personal claim date, which will be the earliest date they can submit a claim for the fourth SEISS grant.
Claims for the fourth SEISS grant must be made by 31 May 2021 at the latest.
Speaking on ‘The Martin Lewis Money Show Live’ on Thursday, Lewis put the question to Sunak asking him why the fourth SEISS grant isn’t available yet.
Lewis also added: "I would have expected it to be next week that people could apply - why is it the end of April you're going to start paying people?"
The Chancellor replied: “The simple reason is the grant covers the period from February to April, so people will need to have a sense of their circumstances over that period.
"The difference this time is we're making an improvement in access to the grant and we want to bring in all of those people who have filed tax returns for 19/20 and that means we need to have those come in, and I think you were keen for us to extend flexibility around the deadline which we did. That has meant we need a little bit of extra time to process all of that.”
Lewis followed up: "Is there any chance you will take a look at bringing that date earlier? The cash flow issue is one of the big ones people are pushing me on.”
The Chancellor said: "In order for us to process the shear millions of claims and tax returns we get in and to then go through them to get the grants out, we do need that time.”
Lewis also touched on whether Sunak would backdate the support for workers that had previously missed out on the eligibility criteria.
Sunak said: "If you were going to go down that road, Martin, of backdating, you'd have to treat everyone the same actually.
“And then backdating everyone's grants would throw up a whole host of questions.
“You'd start going to people and saying 'actually with your new tax return maybe you should have got less than you got last year', and will we have to claw that grant back?"
Last week the UK Government announced that there will also be a fifth and final SEISS grant, covering the period between May and September, which workers will be able to claim from late July if they are eligible.
The amount of the fifth grant will be determined by how much of the claimant’s 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%, the grant will be worth 30% of three months’ average trading profits.
Further details will be provided on the fifth grant in due course.