Martin Lewis grills Rishi Sunak over SEISS timetable
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Rishi Sunak extended support to self-employed workers in his recent Budget. The Chancellor acknowledged some self-employed people had not been able to benefit from SEISS and he attempted to rectify these issues: “I can also announce a major improvement in access to the self-employed scheme.
“When the scheme was launched, the newly self-employed couldn’t qualify because they hadn’t all filed the 2019-20 tax return.
“But as the tax return deadline has now passed, I can announce today that, provided they filed a tax return by midnight last night, over 600,000 more people, many of whom became self-employed last year can now claim the fourth and fifth grants.”
However, according to Old Mill, when Mr Sunak made his Budget statement the details were “somewhat vague” around the claims process for first time claimants, and these are now beginning to emerge.
Chris Bowles, a director at Old Mill, warned “it is important” that affected businesses understand that there is a verification process that must be completed before they can make a claim, and that if they are not ready to respond, they could miss out, because the deadlines are “very tight.”
Expert Accountants and Financial Advisers Old Mill provided the following example of this rigidness: “For example, once those applying for the grant have been contacted by HMRC and then been sent an email with instructions on how to verify their identity, they then have just two days to upload digital copies of their ID and bank documents to the HMRC Dropbox.
“If they don’t, the Dropbox link will expire, and they will fail the pre-verification.”
Chris commented on this: “This complex process appears to have a number of potential flaws and may present challenges for many newly self-employed business owners who may not be familiar with what’s required or are unaware of the very tight deadlines attached to some of the steps involved in the pre-checks.
“There are a number of areas where things can go wrong (just opening a brown envelope from HMRC for instance), and I have real concerns that some people may have difficulties negotiating these pre-verification checks or inadvertently miss deadlines.
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“There’s also a fear that many traders will see this HMRC call as another sophisticated attempt to obtain sensitive personal information at a time when attacks from scammers are widespread.”
Chris also urged affected workers to remember the grants themselves will be impacted by income tax and National Insurance contributions.
As he continued: “Whilst it’s good news that Mr Sunak announced the final extensions to the SEISS, it’s important to highlight that new claimants will need to take into account that, as with previous grants, they will be subject to both Income Tax and National Insurance Contributions that will ultimately need to be budgeted for in the usual way.
“It’s important for people to bring their tax affairs fully up-to-date, rather than leaving everything until the last minute, as this information affects your eligibility, so it makes sense to be proactive in order to get a handle on it.
“Also, the final grant has specific conditions attached around whether your turnover has dropped by the required 30 percent that’s needed to claim for the higher grant amount when it opens in July.
“This can all be a bit confusing for business owners trying to work their way through what can be a bit of a minefield for the first time so I would urge people to speak to their adviser wherever possible.”
In early March, the Government updated their SEISS procedures to allow them to process recently submitted 2019 to 2020 Self Assessment tax returns.
As a result of this, it announced the online claims service for the fourth grant will become available from late April until May 31, 2021.
So long as a person is eligible, they’ll be contacted by HMRC in mid-April to be given their personal claim date.
This will be the date they can make their claim from.
The Government noted more guidance about the fourth grant will be released in “due course”.
This will also be the case for the fifth set of grants, which are set to cover May to September 2021.
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