Sponsored content by David Richmond, Partner, Armstrong Watson

THOUSANDS more workers have been thrown a lifeline after the Chancellor announced an extension to the Self Employment Income Support Scheme (SEISS).

Rishi Sunak clarified the details of the fourth instalment of the scheme in his Spring Budget and also announcement a fifth and final grant to extend support beyond May.

The fourth grant will be worth 80% of three months’ average trading profits, paid in a single instalment and capped at £7,500 in total, covering February to April. It’s claimed 600,000 individuals will now be eligible for the scheme – including those who were newly self-employed in 2019-20 – as long as they filed a 2019-20 Self-Assessment tax return by midnight on 2 March.

However, the fourth grant will not be paid until end of April, a frustration for those who need the money now.

There have been calls for assurances on this, and some might suggest it was kept back until Budget day to hit the headlines at the same time as other support measures. Eligibility criteria remains the same as the third grant, meaning those earning more than £50,000 will continue to be excluded, even if their income has fallen off a cliff since last March.

The fifth grant, covering May to September, will be determined by a turnover test. Those whose turnover has fallen by 30% or more will continue to receive the full grant. Where turnover has fallen by less than 30% they will receive a 30% grant, capped at £2,850.

What’s noticeable is that the grant extension is claimed to cover the self-employed to September, but that is a five-month period starting in May and the grant only provides for three months’ average profits.

This approach didn’t go unnoticed by the self-employed last year when September and October were essentially missed. Those who pay themselves a salary and dividends through their own company will still not be covered by SEISS and will only be covered for their company salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes – another unfortunate gap which continues.

Whilst these announcements may be broadly welcomed, not least as more people are now captured, there will be some frustration that too many still fall through the gaps.

For more information or advice on SEISS grants please contact David Richmond on 01756 620025 or email david.richmond@armstrongwatson.co.uk.