At the start of March the Chancellor Rishi Sunak announced fresh details concerning the Self-Employment Income Support Scheme (SEISS) which has helped millions of workers financially survive the pandemic.
During the Budget announcement Sunak confirmed the value of the fourth SEISS payment and when it is likely to open the doors for applications, but also vitally for many self-employed workers the Chancellor confirmed there will be a fifth and final SEISS grant.
First up, self-employed workers, which includes the vast majority of taxi drivers, will be able to claim the fourth SEISS grant covering February 2021 to April 2021 valued at 80% of average trading profits, up to a maximum of £7,500. Individuals eligible to claim will be provided dates in mid-April.
However, for the fifth and final grant the level of support changes based on how financially affected each individual is.
The fifth SEISS grant will provide support between May and September with the value of the grant based on the claimant's turnover. Despite the support running for a total of five months, only three months of trading profit support will be offered.
The value of the grant will be determined by a turnover test, to ensure that support is targeted at those who need it the most as the economy reopens.
People whose turnover has fallen by 30% or more will continue to receive the full grant worth 80% of three months’ average trading profits, capped at £7,500. People whose turnover has fallen by less than 30% will receive a 30% grant, capped at £2,850.
The fifth and final grant can be claimed from late July. Further details will be published in due course by HM Treasury and HMRC.
No other firm details have been shared on the scheme’s fifth and final grant yet, however the application process is expected to to be similar to the previous four SEISS grants.
According to the Institute of Chartered Accountants in England and Wales (ICAEW) details of how the turnover test will work may not be available for some time. In an article explaining the fifth SEISS grant the ICAEW does however say: “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 ICAEW adds: “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. It also notes that employers will be required to contribute to furloughed employees’ income in July, August and September, and that the self-employed can work and claim whereas no claim under the Coronavirus Job Retention Scheme is possible for hours worked.”