The Chancellor announced in his Budget that both a 4th and 5th grant would be available for the self-employed. However, there are significant changes to the amounts that will be paid out compared to the earlier grants.
For both grants, HMRC will now look at your 2020 tax return as long as it was submitted to HMRC by 2 March 2021. Your trading profits must be no more than £50,000 and at least equal to your non-trading income. This means that you may qualify for the 4th and 5th grants even if you didn’t qualify previously ( this now includes you if you commenced self-employment in 2019/20) or alternatively you may now not qualify.
This will be available from late April 2021 until 31 May 2021.
To qualify you must be currently trading but are impacted by reduced demand due to coronavirus or have been trading but are temporarily unable to do so due the pandemic. You must also intend to continue to trade and reasonably believe that there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus. (Significant reduction is not defined.)
The 4th grant will be calculated at 80% of 3 months’ average trading profits and will be capped at £7,500 in total.
The 5th and final grant will be available from late July 2021.
The main difference here is that this grant will be determined by how much your turnover has been reduced in 2020/21.
If your turnover reduction is 30% or more then you will receive 80% of 3 months’ average trading profits, capped at £7,500.
If your turnover reduction is less than 30%, the you will receive 30% of 3 months’ average trading profits, capped at £2,850.
If you have any questions please do not hesitate to contact us.