More than 600,000 new taxpayers who submitted 2019/20 tax returns via self-assessment on or before 2 March 2021 are eligible for the latest rounds of grants available through the self-employed income support scheme (SEISS).
Chancellor Rishi Sunak confirmed the extension in his Spring Budget on 3 March 2021, in which details of the fourth round of taxable grants were confirmed alongside dates for the “fifth and final” grant.
With more than 23 million people receiving at least one dose of a COVID-19 vaccination, an end is finally in sight for lockdown restrictions that have intermittently been in place around the UK for more than a year.
The Government has not turned off the public spending taps just yet, despite more than £280 billion being spent to prop up the UK economy over the last 12 months.
That figure can only increase with the extension of the SEISS estimated to cost around £33 billion by the time it closes in September 2021, according to the Chancellor.
If you’re one of the five million self-employed people in the UK or you became self-employed in 2019/20 and you recently filed your first personal tax return, here’s what you need to know.
SEISS – Round 4
The Government confirmed the fourth SEISS grant will be worth 80% of three months’ average trading profits, paid out in a single instalment and capped at £7,500 in total.
It will cover the three-month period from 1 February 2021 to 30 April 2021. HMRC will write to those eligible in mid-April 2021, prior to opening a claims window which will run from late April until 31 May 2021.
Self-employed individuals must have filed a 2019/20 tax return through self-assessment by midnight on 2 March 2021 to be eligible for the fourth grant.
SEISS – Round 5
The fifth and final SEISS grant will cover May to September 2021, assuming restrictions ease as planned this year and no further setbacks occur.
Individuals whose turnover has fallen by 30% or more will receive the full grant worth 80%, capped at £7,500.
Those whose turnover has fallen by less than 30% will receive a 30% grant, capped at £2,850. The final grant can be claimed from late July.
Following the extension of the SEISS into the 2021/22 tax year, grants will now be included as income in the tax year in which they are received.
The rule will continue not to apply to any payments made to a partner distributed across the partnership, which is treated as income of the partnership.
A further extension of legislation will be applied to raise a tax charge equivalent to the amount of a SEISS grant to be recovered, where entitlement expired.
Talk to us about accounting for the SEISS.