SEISS: Grants 4 & 5 information
The Self-Employment Income Support Scheme (SEISS) was late arriving compared to other forms of government support to mitigate the effects of the Covid-19 pandemic, and has been changed and altered frequently over the last year. The details of the final two SEISS grants are discussed below.
SEISS Grant 4
Grant 4 of the SEISS is a departure from the previous grants, which were much vaguer when it came to what qualified as being ‘adversely affected’ by the Covid-19 pandemic. In order to qualify for Grant 4, you now have to prove a significant reduction in trading profits as a result of Covid-19 disruption.
It is important to discuss with your accountant what would constitute a ‘significant reduction’ in your trading profits, and which accounting period this will relate to, as well as how to show that this was as a result of Covid-19 pandemic. You must also keep detailed records as evidence of your eligibility, otherwise you may run into difficulty later down the line once the compliance procedure for SEISS is fully up and running.
Important records to keep would include business accounts, records of reduced or cancelled contracts/appointments, and a record of dates where there was reduced activity or capacity due to Government restrictions, including records of dates where you were temporarily unable to trade.
You may also want to keep additional records showing reduction in capacity due to social distancing measures, additional cleaning or turnaround time reducing trading hours, time spent looking for alternative contracts, and additional marketing or promotional time and costs.
SEISS Grant 5
The fifth grant can by claimed from late July 2021 and has a much more detailed set of criteria that applicants need to meet. The grant will pay a percentage of three months’ average profits (the percentage depending on the amount by which turnover has fallen).
Entitlement will depend on a turnover test looking at the reduction in turnover in the year from April 2020 to April 2021.For those with turnover which has fallen by 30% or more, the fifth grant will be worth 80% of three months’ average trading profits. This is capped at £7,500. For those with turnover which has fallen by less than 30%, the grant will be worth 30% of three months’ average trading profits, capped at £2,850.