Self-employed traders who desperately need support will be left hanging, unable to plan or pay their bills as Chancellor Rishi Sunak will delay payment of the next self employed income support (SEISS) grant until after 3 March.
Lewis tweeted on Friday 22 January that he had received confirmation from HM Treasury that the conditions and the amount of the fourth SEISS grant will be announced as part of Rishi Sunak’s Budget statement on 3 March 2021.
This fourth grant is supposed to help self-employed traders, whose businesses have been hit by coronavirus, survive the three months from February to April 2021. Opening the SEISS application portal in March potentially leaves those taxpayers with no income at all in February, just after they have paid a large income tax bill on 31 January.
Answers needed now
Sunak has been promising to provide a fourth grant to support the self employed since at least October 2020, but there has been no indication of how much that grant will be, what profits it will be based on, and crucially when the money will arrive.
Taxpayers who were expecting to apply for this SEISS grant need answers to those questions now. They need to apply to HMRC for time to pay the income tax due for 2019/20, which was partly deferred from July 2020, and the first payment on account for 2020/21.
HMRC has built an online payment plan service to process applications to defer income tax where the amount outstanding is no more than £30,000. However, some applicants are getting rejected by the computer system in spite of meeting all the criteria.
When asking HMRC for time to pay tax (online or by phone) the taxpayer needs to suggest their own payment plan. They can’t do that if they don’t know how much government grant they will receive over the next few months, or whether they will need to pay the first instalment of their 2021/22 business rates due in April 2021.
Conditions may change
Lewis also said he has information from a number of sources indicating that HMRC is making operational changes to the basis for calculating the next SEISS grant.
It seems quite likely that self-employed profits reported on the 2019/20 tax returns will be taken into account for SEISS-4. This may mean that the base figure for the grant will be three months of the average annual profits reported in the three years: 2017/18 to 2019/20.
Such a shift in the profit basis would allow people who launched their own business after 5 April 2019 to qualify for an SEISS grant for the first time.
What about directors?
Always the optimist, Lewis is also hopeful that other business owners who have been left out of the government’s coronavirus support schemes will receive good news in the Budget. This could include directors of small companies who haven’t qualified for the furlough scheme as they take remuneration from their companies in the form of dividends instead of salary.
A pressure group: Forgotten Limited together with the FSB and ACCA presented proposals for a directors income support scheme to a cross-party group of MPs and are optimistic that it will be accepted in some form by the Treasury.
Lewis says his sources are indicating that the principled objections to supporting such directors have fallen away and the only hurdle is how to get money to these people. However, as Lewis says, pressure stills needs to be applied to politicians who make these decisions.
Replies (24)
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There's something about that man that really annoys me. Especially when a client starts a conversation or email with "Martin Lewis said....."
He annoys me also - hideous 'let me show you what you are doing wrong' preacher
The most annoying thing he did was tell everyone to claim the marriage allowance without telling them the actual eligibility criteria! And why does he insist on calling directors self employed all the time just to cause people even more confusion
Always thought him to be at the lowest common denominator of the financial world - which is likely why he has done so well.
I think his site is mainly a place for poors who need guidance on obvious things and how to save 4p on a tin of beans with a coupon.
I suspect it's been delayed until after the new 2019/20 28.2.21 filing deadline, so as to minimize the scope for manipulation of 2019/20 profits and the Budget is just a convenient excuse. I suspect someone like ML would not get that.
The above headline could just as well be "SEISS fourth grant sensibly delayed".
Although I’m no fan of the govt, is this not an inevitable consequence of effectively extending the SA deadline by another month?
I agree and you can bet your sweet dollar (I have no idea why I used that expression) that one of the criteria is that your 2020 tax return had to be submitted by 31st Jan.
Day old insight copied from Justy B above
Problem is is like everything with this government, bypassing the proper way of doing things, eg, the House of Commons and stick in the press first. Not the way it's supposed to be done. Papers always know about government announcements during the pandemic before they are announced. Populist nonsense, just like Brexit campaign, which has us now in this huge mess.
This is so true. The old channels of communication seem to have evaporated in favour of Twitter. But something Rebecca mentioned in this article about Lewis being the de facto shadow chancellor make me stop and think - I haven't the faintest idea who the real shadow chancellor is. And I think that might be part of the problem because in parliament nobody is holding the government to account over the continuing shambles.
It's probably very difficult to hold the Government to account to the level that would normally happen, because of covid. Unfortunately this global problem has caught many by surprise. Let's look at what Boris has had to contend with. All the Brexit stuff, a general election, all the covid stuff, having a new born and the challenges that comes with, trying to cope with the balance of lockdown and business.
I personally think that this Government have done an outstanding job (those on the frontline and behind the scenes dealing with covid come under a very special thankyou) in dealing with what has past. Of course mistakes have been made. That applies to all Governments all over the world. Anne Dodds is shadow chancellor.
Sorry but Boris is a chancer. Was never a Brexiteer before Cameron pledged a referendum and he saw his chance. He could have bided his time and would have taken over from Cameron in time. Brexit is turning into the disaster we all knew.
They have not listened to advice and made major mistakes. They didn't listen because they knew it all.
Not being in the House makes it appear that the government is not being held to account. They are but as usual the press, eg the Mail, Express never find any fault with Boris
Cameron never wanted the job in the first place. The look of dismay on his face when he won was for all to see. However I thought the coalition did a brilliant job and I would liked to have seen them do another 4 years.
Boris is made for being PM and I think he will do better than Maggie. He's got a young team around him and yes you're right he's not afraid to take chances.
Let me give you a scenario which sums up the difference between Boris and Sir Keir.
Boris is head of prosecution and the JS file comes across his desk. Sir Keir doesn't prosecute. You can bet your sweet life Boris would prosecute even if thought he might lose.
Sorry we will agree to disagree. The Brexit trade deal says it all. A total disaster for the country.
That's why the EU will demise in it's present form by the end of next year, maybe even sooner. The EU couldn't run a drinking festival in a brewery. They can't control the immigration problem, How much does Greece owe? they couldn't deal with Brexit (we will punish you for leaving the EU), as for the vaccination program, well the figures speak for themselves. That, my friend, is just the tip of the iceberg.
All this Remoaner "told you so" nonsense reminds me of a technophobe boss I once had in the 1980s. One of his jobs was to analyse insurance company DTI returns, which he painstakingly did by hand. Each one took about 3-4 hours. His own boss brought me in from another department to computerise it. He did not take this very well. Trouble was I still had to report to him so he did everything he could to delay it.
In spite of his interference, I got all the DTI returns for the last 5 years analysed on a great piece of software called Personal Wizard and reduced the preparation time to 20 minutes. Inevitably there were some teething problems though, which he immediately latched on to. "See, it doesn't work" he exploded.
It soon did though, once I'd ironed out all the glitches, and so will Brexit, so don't be too quick to write us off. Hopefully in 5 years we won't be so reliant on the EU and they won't be able to hold us over a barrel at every twist and turn. Then we can pick and choose which regulations to abide by without too much fallout and really make a success of it.
Anneliese Dodds, to give her full name.
and it's pronounced unnerlisa
I would like to see a copy of the email from the Treasury to Martin Lewis which confirms this 'exclusive'.
Not available ? Hm,let me guess;it was instead a cloak and dagger phone call from his 'Treasury Insider'
It's not what you know but who you know.
Martin Lewis seems to be to finance what Dr Hilary is to medicine. I remember when they both started. GMTV have a lot to answer for (spice girls included).
He seems to make clients ask questions which I suppose is good, good from the sense it's 1-2 levels above what they get from the pub or building site.
Bad when you tell them that as a good accountant you have already considered this but they don't meet the criteria or doing so would mean they pay more tax in other areas etc.
ICAEW has now categorically stated that the fourth SEISS grant will be announced in the Budget Statement on 3 March 2021. https://www.icaew.com/insights/tax-news/2021/jan-2021/further-details-on...
"The cautious approach would be to file 2020 tax return by 31st January if you come in the category of claiming the fourth SEISS grant". So guys and gals get those estimates in where necessary.