Rishi Sunak is expected to announce a fifth SEISS grant - here’s everything we know
Chancellor Rishi Sunak is set to announce an extension to self-employment support payments from the government until the end of Summer.
The treasury has confirmed that its coronavirus Self Employment Income Support Scheme (SEISS) will continue to support sole traders and freelance workers.
The fourth payment covers the months of February, March and April 2021. Therefore, a further payment would need to be offered to cover the summer months.
So, will freelance workers be entitled to a fifth payment? This is what we know so far.
Will there be a fifth self employment payment?
The chancellor will announce that there is to be a fifth self employment payment, to support self-employed people “through the challenging months ahead”.
Prior to the unveiling of the budget on 3 March, Mr Sunak said: "Our Covid support schemes have been a lifeline to millions, protecting jobs and incomes across the UK.
"There's now light at the end of the tunnel with a roadmap for reopening, so it's only right that we continue to help business and individuals through the challenging months ahead - and beyond."
What months will the fifth SEISS cover?
Though the finer details of the fifth SEISS grant have not been given yet, it is likely it will follow the same format as the previous four.
If the same format is carried forward, the fifth payment would be a one-off payment to cover the three months of May, June and July.
In a statement to the House of Commons of 2 March, Mr Sunak told how the furlough scheme will be extended until September, but made little reference to details regarding further self-employment support.
As such, it cannot yet be confirmed how support will continue to be provided up to September for those who are self employed.
How much will I be able to claim?
The amount claimable for the fifth SEISS grant has not been outlined, though the fourth grant has now been confirmed as payable at 80 per cent of monthly earning, up to £2,500 per month.
This means the one off payment to support three months of lost income will be paid at a maximum of £7,500 for the fourth payment.
The UK government has announced that the furlough scheme will be contributed to by employers from July - at a rate of 10 percent and 20 percent in July and August respectively.
Therefore, self-employed workers who do not have an employer to contribute could see a cut to support from the 80 per cent rate in the fifth payment.
Additionally, the third self employment grant was originally only offered at 20 per cent of monthly earnings in December 2020, as lockdown was supposed to lift and reopen the economy.
However, a lockdown over Christmas resulted in the support being offered at the higher rate of 80 per cent.
As such, it would appear that the government is keen to scale back on support offered when lockdown is lifted significantly throughout April, May and June.
Who will be eligible for the fifth payment?
The details of the fifth payment have not been outlined, but the fourth payment has already broadened the eligibility criteria to allow “many” more self-employed workers to benefit.
To make a claim to the scheme, your business must have incurred economic downturn from the impact of coronavirus, which will have caused a significant reduction to your profits.
Traders who are continuing to trade but who face restrictions which impact their profit making, or who are unable to trade are eligible to apply.
The chancellor will announce at the budget on 3 March that those who began sole trading in 2019 will now also be able to receive support.
To receive a grant from the government in the fourth wave of payments, the need to submit 2018-2019 self-assessment tax returns will not be necessary to apply.
Instead, 2019-2020 and 2020-2021 tax returns will be sufficient to apply. This criteria would be expected to be extended into the fifth SEISS grant.
Michelle Ovens CBE, founder of Small Business Britain, said of the extended eligibility criteria for the fourth grant: "I am also pleased to see the chancellor has extended the number of people eligible for the Self-Employment Income Support Scheme (SEISS), to take into account the newly self-employed.
"With the pandemic restrictions continuing for a much longer period that originally anticipated, it is right that eligibility is extended.
"This intervention from the government will directly support sole traders and entrepreneurs who will no doubt play an important role in the UK's economic recovery and future growth."
Other eligibility expected to continue into the fifth SEISS application include that members of a partnership can also claim, and support will be based on their share of the partnership’s profit.
Applicants must be able to prove that they plan to continue trading or providing a service beyond the end of the support window - expected to be the end of July.
This article will be updated when more information is available.