You will receive this by email, letter, or via contact within HMRC’s online service. Claims must be made before the 1st of June, and the fourth grant covers the period from the 1st of February – 30th of April.
Can I claim?
To be eligible to claim you need to fulfil the following criteria:
- be a self-employed individual or a member of a partnership. (You cannot claim if you trade through a limited company or a trust.).
- Traded from 2019 to 2020 and submitted your tax return on or before 2 March.
- You also need to have traded in 2020 to 2021.
- You must be currently trading but be impacted by reduced demand due to COVID-19 or have been trading but are now temporarily unable to because of COVID-19.
- You need to declare that you intend to continue to trade, and reasonably believe there will be a significant reduction in your trading profits.
- You will need to keep evidence that shows how your business has been impacted by coronavirus resulting in less business activity than otherwise expected.
Before you make a claim, HMRC ask 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, and you should wait until you have a reasonable belief that your trading profits are going to be significantly reduced before you make your claim.
HMRC works out your eligibility.
To work out your eligibility for the fourth grant, HMRC will look at your 2019 to 2020 Self-Assessment tax return. Your trading profits need to 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, they will then look at the tax years 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020.
But there are some circumstances that can affect eligibility.
For example, if your return is late, amended or under enquiry, if you are a member of a partnership, or you had a new child.
Other circumstances include whether you have loans covered by the loan charge provisions, if you claim averaging relief, if you are a military reservist, or if you are a non-resident or chose the remittance basis.
Maternity Allowance claims do not affect eligibility.
How much is the grant worth?
HMRC say the fourth grant is calculated at 80 per cent of three months’ average trading profits.
“It will be paid out in a single instalment and capped at £7,500 in total,” HMRC state.
“How much you receive will depend on your average trading profits.
“We’ll work out your average trading profits using up to four years’ of submitted tax returns. This may affect the amount you’ll get which could be higher or lower than your previous grants.
“We’ll 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.”
If you would like more information about this grant, or if we can help you with anything else, contact CDC today. Our team is here to help you save time and money.