To claim the SEISS 4th 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. For example, if 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 the coronavirus pandemic.
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 SEISS 4th 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 SEISS 4th 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 in her trading profits. She is eligible for the SEISS 4th 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 SEISS 4th 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 SEISS 4th Grant.
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 SEISS 4th 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 SEISS 4th Grant.
An electrician is still trading but has had increased costs due to buying masks, cleaning supplies and screens. She is not eligible for the SEISS 4th 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 SEISS 4th 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 in his trading profits. He is not eligible for the SEISS 4th 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 SEISS 4th 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 SEISS 4th Grant.
How can you apply for the SEISS 4th Grant?
HMRC has confirmed that it will be contacting eligible self-employed individuals based on their tax returns in mid-April to give a date for making applications
Communications will be sent either by email, letter or within the online service.
The online service to claim the fourth grant will be available from late April 2021. If you do not hear from Hmrc then please login to the online service to check whether you are eligible for the 4th Grant.
All claims must be made on or before 1 June 2021.
SEISS 4th Grant Claims must be made by the individual and cannot be processed by a tax agent or adviser to claim on your behalf as this will trigger a fraud alert, which will delay payment.
To make a claim, applicants will need the following:
- – Self Assessment Unique Taxpayer Reference (UTR);
- – National Insurance number;
- – Government Gateway user ID and password; and
- – UK bank details including account number, sort code, name on the account and address linked to the account.
Only provide bank account details where a BACS payment can be accepted.
HMRC will check claims and take appropriate action to withhold or recover payments found to be dishonest or inaccurate with a penalty system in place.
If an amendment to a tax return on or after 3 March 2021 lowers the amount you are eligible for, HMRC must be informed within 90 days.
There is no requirement that an earlier SEISS grant has been claimed in order to be able to claim the upcoming SEISS 4th Grant.
Further details are available here.
How can MCL Accountants help?