This change may result in a higher or lower grant being received than done so previously but will mean an estimated 600,000 newly self-employed people will now be eligible for the claim.
But who can claim…?
To be eligible for the fourth grant you must be a self-employed individual or a member of a partnership.
To work out your eligibility HMRC will first look at your tax return for the year ended 5 April 2020. Your trading profits must be no more than £50,000 and at least equal to your non-trading income.
If you are not eligible based upon your 2020 tax return, HMRC will then look at your previous three tax years.
You must also have traded in both tax years:
- 2019 to 2020 and submitted your tax return by 2nd 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
- you reasonably believe there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus
How are the grants calculated?
The fourth grant will provide a taxable grant calculated at 80% of 3 months' average trading profits. The grant will be paid out in a single instalment and capped at £7,500 in total.
The amount of the fifth grant will be determined by how much your turnover has been reduced in the year April 2020 to April 2021.
The fifth grant will be worth:
- 80% of 3 months' average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more
- 30% of 3 months' average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%
When are the grants available?
To allow HMRC to process recently submitted 2019 to 2020 Self Assessment tax returns, the online claims service for the fourth grant will be available from late April 2021 until 31 May 2021. HMRC will contact you in mid-April to give you your personal claim date. This will be the date that you can make your claim from.
The fifth grant is expected to be the final grant and will cover May to September and you will be able to claim from late July.
How do I make the claim?
To make your claim, you will need to login in through your government gateway and will require the following:
- Unique Taxpayer Reference
- National Insurance number
- UK bank details including account number, sort code, name on the account and address linked to the account
If you do not already have a government gateway set up, we would recommend you do this prior to April 2021 to ensure you can make your claim as soon as possible following receipt of your personal claim date. Please contact us if you require any assistance setting up your gateway login, however, please note, claims must be made by yourself and cannot be claimed by your tax adviser.
If you need any further advice and support, get in touch:
Tel: 01626 610071