The online service to claim the fourth grant is now live.
If you’re eligible based on your tax returns, HMRC may have contacted you in mid-April to give you a date that you can make your claim from. It will be given to you either by email, letter or within the online service.
You’ll need to confirm you meet other eligibility criteria when you make your claim. You must make your claim on or before 1 June 2021.
The fourth grant covers 1 February 2021 to 30 April 2021.
You can follow these steps to help you understand what you can do now.
Find out who can claim
Check that your business has been impacted by coronavirus.
Find out how HMRC works out your grant.
Find out what happens after you’ve claimed.
Make a repayment of the SEISS grant where you should not have claimed
Register for the next live webinar about Self-Employment Income Support Scheme – fourth grant.
This webinar takes you through the aim of the scheme, who can apply, how much you may be entitled to, how to claim the fourth grant, and what happens after you have claimed.
WHO CAN CLAIM?
To be eligible for the fourth grant you must be a self-employed individual or a member of a partnership. You cannot claim the grant if you trade through a limited company or a trust.
You must have traded in both tax years:
2019 to 2020 and submitted your tax return on or before 2 March 2021
2020 to 2021
You must either:
be currently trading but are impacted by reduced demand due to coronavirus
have been trading but are temporarily unable to do so due to coronavirus
You must also declare that you:
intend to continue to trade
reasonably believe there will be a significant reduction in your trading profits
Reasonable belief
In order to claim the fourth grant, you must reasonably believe that you’ll suffer a significant reduction in trading profits, due to reduced business activity, capacity, demand or inability to trade due to coronavirus between 1 February 2021 and 30 April 2021.
You must keep evidence that shows how your business has been impacted by coronavirus resulting in less business activity than otherwise expected.
HMRC expects you to make an honest assessment about whether you reasonably believe your business will have a significant reduction in profits.
Significant reduction
Before you make a claim, you must decide if the impact on your business between 1 February 2021 and 30 April 2021 will cause a significant reduction in your trading profits for the tax year you report them in.
HMRC cannot make this decision for you because your individual and wider business circumstances will need to be considered when deciding whether the reduction is significant.
You should wait until you have a reasonable belief that your trading profits are going to be significantly reduced, before you make your claim.
You do not have to consider any other coronavirus scheme support payments that you have received when deciding if you’ve had a significant reduction in your trading profits.
There are some examples that can help you decide and we break these down at the foot of the page.
How HMRC works out your eligibility based on your tax returns
To work out your eligibility for the fourth grant we’ll first look at your 2019 to 2020 Self Assessment tax return. Your trading profits must be no more than £50,000 and at least equal to or more than your non-trading income.
If you’re not eligible based on your 2019 to 2020 Self Assessment tax return, we’ll then look at the tax years 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020.
Find out more information on how HMRC works out trading profits and non-trading income for the self-employment income support scheme.
How different circumstances affect the scheme
There are some circumstances that can affect your eligibility such as if:
If you claim Maternity Allowance this will not affect your eligibility for the grant.
Find out more information on how your circumstances affect your eligibility.
HOW MUCH YOU WILL GET
The fourth grant is calculated at 80% of 3 months’ average trading profits. It will be paid out in a single instalment and capped at £7,500 in total. How much you receive will depend on your average trading profits.
We’ll work out your average trading profits using up to 4 years’ of submitted tax returns. This may affect the amount you’ll get which could be higher or lower than your previous grants.
We’ll take into account trading profits from the 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020 tax years. If you have a gap in the years you have traded, we’ll only use your most recent returns after the gap to work out the grant.
This is an example of how we’ll work out how much grant you’ll get if your average trading profits were £42,000 over the last 4 tax years.
Example
Start with your average trading profit (£42,000).
Divide by 12 = £3,500.
Multiply by 3 = £10,500.
Work out 80% of £10,500 = £8,400. You’ll receive £7,500 due to the cap.
Find out more information on how HMRC work out your trading profits.
HMRC look at your trading profits and non-trading income on your Self Assessment tax returns to check if you meet the eligibility criteria for the fourth grant.
We also use your average trading profits to work out how much grant you’ll get.
How we work out your trading profit and non-trading income eligibility
How we work out your average trading profits and grant amount
HOW TO CLAIM
You must make the claim yourself. You must not ask a tax agent or adviser to claim on your behalf as this will trigger a fraud alert, which will delay your payment.
HMRC will check claims. We’ll take appropriate action to withhold or recover payments for claims found to be dishonest or inaccurate. If you know you’re not eligible for the grant and do not tell us, you may also have to pay a penalty.
Online services may be slow during busy times. Check if there are any problems with this service.
START NOW
If an amendment to your tax return on or after the 3 March 2021 lowers the grant amount you’re eligible for, you’ll need to tell us within 90 days. You may need to pay back some or all of the grant.
We’ll provide more information by mid May 2021 about what to do if you’re not sure if your grant amount has reduced.
Return to your claim
If you need to return to your claim, you can:
check the status of your payment
update your bank details if we have asked you to
check how much you got for previous grants
check to see if you think the grant amount is too low
After you’ve claimed
We’ll check your claim and pay your grant into your bank account within 6 working days. We’ll send an email when your payment is on its way.
Do not contact us unless it has been more than 10 working days since you made your claim and you have not received your payment in that time.
If your business recovers after you’ve claimed, your eligibility will not be affected as this is based on your reasonable belief that your trading profits would have been significantly reduced at the time you made your claim. You must keep evidence to support this.
If you made a claim in error as you were not eligible for a grant or would like to make a voluntary repayment, tell HMRC and pay some or all of the grant back.
Records you need to keep
You must keep a copy of all records in line with normal self-employment record keeping requirements, including the:
amount claimed
grant claim reference
If you’re currently trading but have reduced demand
You must keep any evidence that your business has had reduced activity, capacity or demand due to coronavirus at the time you made your claim, such as:
business accounts showing reduction in activity compared to previous years
records of reduced or cancelled contracts or appointments
a record of dates where you had reduced demand or capacity due to government restrictions
If your business is temporarily unable to trade
You must keep evidence if your business has been unable to trade due to coronavirus, such as:
a record of dates where you had to close due to government restrictions
NHS Test and Trace communications - if you’ve been instructed to self-isolate in-line with NHS guidelines and are unable to work from home
a letter or email from the NHS asking you to shield
test results if you’ve been diagnosed with coronavirus
letters or emails from your child’s school with information on closures or reduced hours
You can check a list of genuine HMRC contacts if you receive any suspicious texts, calls or emails claiming to be from HMRC as this may be a scam.
TAXING THE GRANT
The grant is subject to Income Tax and self-employed National Insurance Contributions. It must be reported on your 2021 to 2022 Self Assessment tax return.
The grant also counts towards your annual allowance for pension contributions.
SEISS grants are not counted as ‘access to public funds’, and you can claim the grant on all categories of work visa.
SEISS GRANT FIVE
There will be a fifth grant covering May 2021 to September 2021.
Guidance on how to claim the fifth grant will be provided in due course.
WHO IS ELIGIBLE?
To claim the fourth grant you must have been
impacted by reduced activity, capacity and demand or
been previously trading but are temporarily unable to do so.
What we mean by impacted by reduced activity, capacity and demand
This applies to your business if it has been impacted by reduced activity, capacity or demand due to coronavirus. For example, you:
have fewer customers or clients than you’d normally expect, resulting in reduced activity due to social distancing or government restrictions
have one or more contracts that have been cancelled and not replaced
carried out less work due to supply chain disruptions
You must not claim if the only impact on your business is increased costs.
If for example, you’ve had to purchase face masks and cleaning supplies. This would not be considered as reduced activity, capacity or demand.
What we mean by previously trading but are temporarily unable to do so
This applies to you if you’re temporarily unable to carry out your business activities due to coronavirus, because for example:
your business has had to close due to government restrictions
you’ve been instructed to shield or self-isolate in-line with NHS guidelines and are unable to work from home
you’ve tested positive for coronavirus and are unable to work
you cannot work due to caring responsibilities, for example as a result of school or childcare facility closures
If your business had to close before 1 February 2021 and continued to be closed for a period of time up to 30 April 2021, you can claim if you are eligible.
Examples of reduced activity, capacity or demand or unable to trade
These are examples of people who have been impacted by coronavirus.
Reduced activity, capacity or demand and reasonable belief
A cafe owner has fewer customers due to government restrictions and is only allowed to offer take-away service, which reduces her takings. She reasonably believes this will significantly reduce her trading profits. She is eligible to claim the fourth grant.
A plasterer cannot get materials due to supply chain issues due to coronavirus. This has reduced the amount of work he can complete and be paid for. He reasonably believes this will significantly reduce his trading profits. He is eligible to claim the fourth grant.
A part-time personal trainer works in a gym that has closed due to government restrictions. This reduces her business activity on the days that she works. She reasonably believes this will have a significant reduction on her trading profits. She is eligible for the fourth grant.
Reduced activity, capacity or demand and no reasonable belief
A cafe owner has fewer customers due to government restrictions on households mixing, which initially reduces her takings. She increases her prices and believes her trading profits will not reduce significantly, so she is not eligible to claim the fourth grant.
A plasterer cannot get materials due to supply chain issues due to coronavirus. This has reduced the amount of work he can complete and be paid for, but he manages to quickly find a new supplier. He does not believe that the reduced demand will cause a significant reduction in his trading profits. He is not eligible to claim the fourth grant.
Unable to trade and reasonable belief
A hairdresser has had to shut his shop due to government restrictions. He will not have any income due to the closure and reasonably believes the reduction in his trading profits will be significant. He is eligible to claim the fourth grant.
A builder has received a letter from the NHS identifying him as clinically extremely vulnerable and it asks him to stay at home. As he is unable to work from home he has a reasonable belief that there will be a significant reduction in his trading profits. He is eligible to claim the fourth grant.
NON-ELIGIBLE EXAMPLES
Unable to trade and no reasonable belief
A mechanic was unable to work for 2 days as his premises had to be closed to be deep-cleaned due to a positive coronavirus case. He does not believe this will significantly reduce his trading profits. He is not eligible to claim the fourth grant.
A builder has developed coronavirus symptoms and self isolates for 5 days before receiving a negative test result. During those 5 days he was unable to work from home but was able to rearrange his contracts. He does not believe there will be a significant reduction in his trading profits. He is not eligible to claim the fourth grant.
Other not eligible examples
An electrician is still trading but has had increased costs due to buying masks, cleaning supplies and screens. She is not eligible for the fourth grant because increased costs were the only impact on her business and she has not lost customers.
A dentist returns from essential travel abroad and has to self-isolate for 10 days in a hotel due to quarantine rules. As this is the only impact on her business, she is not eligible to claim the fourth grant. This is because reduced demand due to self-isolation after foreign travel is not included in the eligibility criteria.
An accountant reduces his business activity because he wants to partially retire. He reasonably believes this will have a significant reduction on his trading profits. He is not eligible for the fourth grant because the reduced business activity was not caused by coronavirus.
The client of a dog walker cancels a contract due to coronavirus. The dog walker could but chooses not to look for additional work to replace the contract. This means her business activity and her trading profits are reduced because she chooses not to replace the contract and not because of coronavirus. She is not eligible for the fourth grant.
An IT consultant has other income from renting property. He has made losses on renting due to renovation costs. This is not related to his trading profits from his IT consultancy service. As his consultancy business has not been affected due to coronavirus, he is not eligible for the fourth grant
OTHER HELP YOU CAN GET?
Get other financial support
You may be able to claim Universal Credit, but even if the claim is not approved it will affect any tax credits you claim and may affect other benefits. So you should:
check how tax credits and other benefits affect each other
find out what to do if you’re already getting benefits
If you make a claim for Universal Credit the grant may affect the amount you get, but will not affect Universal Credit claims for earlier periods.
The government is also providing the following help for the self-employed. Find out what support you can get if you’re affected by coronavirus.
If you have other employment as a director or employee paid through PAYE your employer may be able to get support using the Coronavirus Job Retention Scheme.
You can watch videos and register for free webinars to learn more about the support available to help you deal with the economic impacts of coronavirus.
Use HMRC’s digital assistant to find more information about the coronavirus support schemes.
Find coronavirus financial support for your business.