HMRC announces a fifth grant pointed towards self-employed personnel

Self-Employment Income Support Scheme fifth grant

The Team of AAziz & co accountant and tax consultants have been trying our best to update you on all Tax related queries of Self-Assessment arises from HMRC. For the fifth grant, claims can be made from July 2021. Self-employed persons whose turnover has fallen by more than 30% will continue to qualify for the 80% grant. Those with decreases in turnover of less than 30% will be restricted to a 30% claim. The UK government recognizes the continued impact that coronavirus (COVID-19) has had on the self-employed and announced in November that there would be a fourth grant.
Your eligibility for the scheme will now be based on your submitted 2019 to 2020 tax return. This may also affect the amount of the fourth grant which could be higher or lower than previous grants you may have received.

1.Who can claim

  • All qualifying self-employed businesses can continue to claim SEISS grants if they continue to be adversely affected by COVID lockdown. The present scheme was due to end 30 April 2021. This has now been extended to 30 September 2021.
  • Your trading profits must be no more than £50,000 and at least equal to your non-trading income.
  • You must submit your tax return for 2019 to 2020 and 2020 to 2021 submitted your tax return by 2 March 2021.
  • You must be currently trading but are impacted by reduced demand due to coronavirus.
  • You must 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.

    2. How to claim:

    After 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. If you are eligible, 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.

    3. Further support:

    The UK government has also announced that there will be a fifth and final grant covering May to September. you will be able to claim from late July if you are eligible for the fifth grant. 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:

    I) Taxation Changes:

    Many of the tax changes announced are for a fixed period, generally, from April 2021 to April 2026. This does provide welcome certainty for businesses.

    II) Income Tax 2021-22 to 2025-26:

    The basic rate threshold is increasing to £37,700 for 2021-22 (2020-21: £37,500) and then frozen until April 2026. For the same period, the personal tax allowance is set at £12,570 £12,500) and will apply to all regions of the UK.

    III) National Insurance:

    NIC Upper Earnings limits and Upper Profits limits will also remain at a fixed amount until April 2026 and will be based on the Income Tax higher rate threshold of £50,270.