The 4th round of Self Employment Income Support Scheme payments can be claimed from mid-April. HMRC should have already made contact to advise you on the date you can make a claim.

All claims must be made before June 1st 2021 and proof of eligibility will be needed when making a claim.

Eligibility

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.

How HMRC works out your eligibility based on your tax returns

To work out your eligibility for the fourth grant HMRC 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.

Find out more information on how your circumstances affect your eligibility

How much you’ll 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.

HMRC will 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.

HMRC 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 they 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

How to make claim

For details see: https://www.gov.uk/guidance/claim-a-grant-through-the-self-employment-income-support-scheme