This month, sole traders and partnerships can apply for the 4th phase of the Self Employment Income Support Scheme. There are some changes to the 4th phase in comparison to phases 1 to 3 so if you were not eligible to claim previously, that may not be the case this time around. So, if you’re trading as a sole trader or partnership, please read on as there are grants of up to £7,500 available that you may now be eligible for.
Self Employed Income Support Scheme – who can claim?
To be eligible for the 4th 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 the tax year ended 5 April 2020 (and submitted your tax return on or before 2 March 2021) and the tax year ended 5 April 2021, even if that was at a reduced rate due to Covid-19. For phases 1-3, you needed to have traded in the tax year ended 5 April 2019 – this is not the case for phase 4.
The 4th grant covers 1 February 2021 to 30 April 2021.
If we prepared your personal tax return for the year ended 5 April 2020, it will have been submitted by 2 March 2021.
You must either be currently trading but are impacted by reduced demand due to the coronavirus, or have been trading but are temporarily unable to do so due to the coronavirus. You must also declare that you intend to continue to trade and that you reasonably believe that there will be a significant reduction in your trading profits.
You will be eligible if your trading profits are less than £50,000 and at least equal to – or more than – your non-trading income for the year ended 5 April 2020.
If this isn’t the case, HMRC will look at your average trading profits for the 4 tax years ended 5 April 2017 to 5 April 2020 and, if that average is below £50,000, then you will qualify.
If you’re not sure whether you qualify, if we prepare your personal tax return we will have this information on our files so please get in touch and we can run through it with you.
How much you’ll get
The 4th grant is calculated at 80% of 3 months’ average trading profits, capped at £7,500. How much you receive will depend on your average trading profits over the last 4 years. This may affect the amount you’ll get which could be higher or lower than your previous grants, because previously it was the average of 3 years’ trading profits to 5 April 2019.
Making your claim
To make your claim, click here: https://www.gov.uk/guidance/claim-a-grant-through-the-self-employment-income-support-scheme
You must make your claim for the 4th grant on or before 1 June 2021. HMRC will check your claim and pay your grant into your bank account within 6 working days.
As always, if you need any further assistance then please get in touch.
Good luck to all of those in hospitality that will be opening their doors for the first time in a while next week!