MILLIONS of self-employed Brits will be given a £7,500 financial lifeline thanks to the fourth self-employment grant.
Chancellor Rishi Sunak unveiled further details about the scheme in today’s Budget – including who’s eligible and how much it’s worth.
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The fourth grant will cover lost earnings through February, March and April as a result of coronavirus.
Eligible self-employed workers who have lost income due to the virus will be able to claim 80 per cent of earnings each month up to a cap of £2,500.
The Chancellor also confirmed that a fifth and final grant will be available covering lost income for June, July and August.
This value of this grant will be determined by a turnover test,
meaning businesses will get different levels of support depending on how severely they are affected.
Like the previous payouts, the grants will be part of the self-employment income support scheme (SEISS).
The Chancellor has confirmed that both grants will be available for 600,000 newly self-employed workers as long as they submitted a tax return by midnight last night.
For now, here’s everything we know about the fourth SEISS grant so far:
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When does the fourth grant come into effect?
In today’s budget, the Chancellor announced that the fourth grant will be worth £7,500 and that applications will be open from late-April.
The system for the fifth grant will be open from July.
Sunak also revealed that the thousands of people who became self-employed in 2019-20, will now be able to claim direct cash grants under the Self-Employment Income Support Scheme.
Anyone who filled in a tax return by midnight last night will be able to get the extra help available in both the fourth and fifth grants.
A total of 2.7million self-employed people have got access to help so far, and this will take the total to more than 3.3 million.
How much will the fourth grant be?
The latest grant will be worth up to 80 per cent of average monthly profits up to a maximum of £2,500 a month.
That means self-employed people can access the £7,500 in extra help that others have been able to claim.
For the fifth grant, people will continue to receive grants worth three months of average profits however the amount you get will depend on how severely your business has been affected.
People whose turnover has fallen by 30 per cent or more will continue to receive the full 80 per cent grant. People whose turnover has fallen by less than 30 per cent will therefore have less need of taxpayer support and will receive a 30 per cent grant.
Who is eligible for the fourth grant?
Up to three million self-employed workers were not eligible for the first three grants.
When the self-employment scheme was launched, the Treasury said the help was based on tax returns for 2018-2019, the most recent year for which data was available.
They said it wasn’t possible for the newly self-employed to qualify, and said it could open up the system to fraud.
But now this data is available, it means hundreds of thousands more people are eligible for the extra help.
The chancellor confirmed today that as long as newly self-employed people have submitted a tax return by midnight last night – they will have access to the final two grants.
However, there are likely to be other criteria applied. For instance to receive the third grant, you had to meet the following criteria:
- Self-employed workers must have been eligible for the first and second grant – even if you didn’t claim them. (This is with the exception of some people who became eligible after a couple of rule changes in August.)
- You needed to declare that you intended to continue trading and that you were either currently actively trading but impacted by reduced demand due to the coronavirus or previously trading but were temporarily unable to do so due to the pandemic.
- You must have filed a tax return for 2018/19, meaning you must have been self-employed before April 6, 2019.
- You must also have been earning more than half of your total income from self-employment.
- Your trading profit must have been less than £50,000 a year.
The budget documents say that all the same criteria will apply to the fourth and fifth grants, with more details available in due course.
How do I apply?
To apply for the grant you need to make your claim via the Gov.uk website once it opens for applications in late April.
Self-employed workers need the following info to claim:
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Why was the fourth grant announcement delayed and will it affect when I get paid?
It is not clear why the Government took so long to unveil details on the fourth grant.
Martin Lewis from MoneySavingExpert criticised the delay in the announcement in a video posted to Twitter last month.
Lewis called on politicians to put pressure on the Government to bring it forward rather than waiting until the budget to announce the details.
He said: “For me, it does seem to be unnecessary cruel to make people who are in dire financial need of support in the midst of this horrible coronavirus pandemic, wait on tenterhooks to see what kind of money they are going to get.”
The delay to the announcement should not affect when people get their money, as applications are opening from late-April.
For the first three grants, applications did not open until weeks or months into the period that the grant covered.
For example, applications for the second grant opened for applications on August 17 despite it covering the three-month period from July 14.
This means that people will not necessarily receive their fourth grant money any later than they did relative to the previous grants.
However, the difference in the past is that people knew in advance how much they would get and who would get it.
Martin Lewis said the delay “stops them planning, stops them budgeting, stops them having legitimate expectations.”
He added that “managing expectations in this time is absolutely crucial.”
Mr Sunak also revealed in today’s Budget:
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