In his March Budget, Chancellor Rishi Sunak, confirming that the Self Employment Income Support Scheme (SEISS) grant will be extended for a fourth time – which is welcome news for self-employed workers.
Previous versions of the scheme had been criticised for failing to protect those who had recently begun working for themselves.
Taking these issues into account, the Chancellor has confirmed that SEISS 4 will be extended to include those who became self-employed in 2019/20 and who completed a tax return for the same year. Under the scheme, self-employed workers affected by Covid-19 could get up to 80 per cent of their average trading profits in a three-month period as a one-off lump sum.
Newly self-employed taxpayers may be required to undergo pre-verification checks before they can access the fourth SEISS grant,
SEISS 4 applications can be made via the Government website
What are the rules for SEISS 4 grant clawbacks?
It is important to be aware that HMRC has issued new rules relating to amended tax returns which could mean the repayment of some or all of the SEISS 4 grant.
The new rules affect an amended return for any of the tax years from 2016/17 through to 2019/20, if submitted on or after 3 March 2021 where a SEISS 4 grant has, or will be, claimed.
The basic rule for SEISS 4 is that amendments to submitted tax returns on or after 3 March 2021 won’t be taken into account by HMRC when working out eligibility and calculating grants.
If the amendment would have resulted in an individual no longer being eligible for the grant, they will need to pay it back in full.
If the amendment would have resulted in a lower grant being received, then the excess will need to be repaid.
These rules are subject to a de minimis limit, which means that no repayment is needed if:
- The amount of the SEISS 4 grant received was £100 or less or
- The excess to be repaid is £100 or less
This requirement only applies to SEISS 4 claims
There is no requirement to pay back any amounts received under earlier rounds of grants, where the rules remain that any amendment made after 26 March 2020 is effectively ignored.