Self-Employment Income Support Scheme (SEISS) fourth grant

Self-Employment Income Support Scheme (SEISS) fourth grant

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The Self-Employment Income Support Scheme (SEISS)  supports self-employed people including members of   business partnerships whose business has been  adversely affected by Coronavirus (Covid-19).   In this video we'll be looking at an overview  of the scheme, who can claim examples of   reduced demand or businesses unable to  trade, how much you may be entitled to   how to claim the fourth grant what happens after  you've claimed and what other support is available   we'll also look at a few examples to give you  a better understanding of how the scheme works.   Overview of the scheme The SEISS scheme support self-employed individuals,  including members of business partnerships   whose income has been affected  by Covid-19 (coronavirus). The scheme has been extended providing a  fourth and fifth grant to cover the period   1 February 2021 to September 2021.   The scheme provides support to eligible  self-employed individuals who are currently   trading. The fourth and fifth SEISS grants  are based on the most recent data available.   This is the 2019-20 Self Assessment tax return,  along with the previous years' tax returns.

So if your tax return for 2019-20  shows an increase or decrease in your   average trading profits, compared to the  return used to calculate previous grants,   your fourth SEISS grant will be higher  or lower than the previous grants. If you're eligible and want to claim then  you must make your claim for the fourth grant   by 23:59 on Tuesday 1 June 2021. if you  think you're eligible but we haven't contacted   you with a personal claim date, you can check by  signing in to the online claim service on GOV.UK.

The fourth grant will provide a taxable  grant worth 80% of 3 months'   average trading profits paid in a single  installment and capped at £7,500. To make a claim for the fourth grant you must   have reasonable belief that you'll suffer  a significant reduction in trading profits   due to reduced business activity, capacity,  demand or inability to trade due to coronavirus.   Between 1 February 2021 and 30 April 2021 and intend to continue to trade as well. HMRC expects you to make an honest assessment  about whether your business has been impacted   by coronavirus. You can make a claim even  if you didn't claim for a previous grant.   If an amendment to your tax return on or after  3 March 2021 lowers how much you're   eligible for, you'll need to tell us within 90 days.  You may need to pay back some or all of the grant. The grant will be subject to Income Tax  and self-employed National Insurance. If  

you receive the fourth grant you must report this  on your Self Assessment tax return for 2021-22. These grants are not counted  as access to public funds   and you can claim the grant  on all categories of work visa.  If you're eligible for the fifth grant you'll be  able to claim from late July. The amount of the   fifth grant will be determined by how much your  turnover has been reduced in the tax year 2020-21.  

The fifth grant will be worth 80% of  three months' average trading profits capped at   £7,500 for those with  a turnover reduction of 30% or more or   30% of 3 months' average trading profits  capped at £2,850 for those with a turnover   reduction of less than 30%. Further details  will be provided on the fifth grant in due course. Who can claim? The eligibility criteria are mostly  unchanged from the third grant   with the notable exceptions that  you must have been trading both   in the tax year 2019-20 and submitted  your Self Assessment tax return by   2 March 2021 and in the tax year 2020-21 (or  would have been if not affected by coronavirus). If the information in your Self Assessment returns  show that you may be eligible, then you can claim   the fourth grant If: you're a self-employed  individual or a member of a business partnership,   your business has been impacted by coronavirus  between 1 February 2021 and 30 April 2021, you meet the eligibility conditions -  including any new ones. We'll tell you more about   the specific impact your business must have  experienced to be eligible later in the webinar. You can't claim the grant if you  trade through a limited company   or a trust. (If you claim Maternity Allowance this  will not affect your eligibility for the grant.) As with the previous three grants HMRC will  assess if you're eligible for the fourth grant   based on your trading profits and non-trading  income on your Self Assessment tax returns.  

Firstly we'll look at your Self Assessment tax  return for 2019-20. Your trading profits must   be no more than £50,000 and at  least equal to your non-trading income. If you're not eligible based on the 2019-20  tax return we'll look at up to 4 tax years   depending on which of the following years you  traded in: 2016-17; 2017-18; 2018-19 and 2019-20. If you have a gap in the years you've traded  we'll only use your most recent tax years.  After the gap to work out your  eligibility you must tell us if   you make an amendment to any of your tax  returns on and after 3 March 2021 which either lowers the amount you're eligible  for or causes you to no longer be eligible.

This is because any amendments made  on or after 3 March 2021   won't have been considered when looking at  your eligibility or the amount of the grant   you're entitled to. You may therefore need  to pay back some or all of the grant if an   amendment lowers the amount you're eligible  for or causes you to no longer be eligible. If you amend your return before claiming  your grant you must tell us within 90 days   of receiving your grant. If you amend your return  after receiving your grant you must tell us within   90 days of making the amendment. If you don't  tell us you may also need to pay a penalty. You don't need to tell us if either the  amount you're eligible for is lowered by £100   or less, or you're no longer eligible and the  grant you received was £100 or less.  

If you're not sure if the amount of your grant  has lowered you should contact us for further help.  You can also tell us if you want to voluntarily  pay back some of the grant you received   and you can do this at any time. Please  visit GOV.UK for more information.   Who can claim? As mentioned before you  must have been trading in both the 2019-20   and 2020-21 tax years (or would have  been if not affected by coronavirus). You must also have trading profits (not a trading  loss) based on either your 2019-20 tax return or an   average over the four tax years 2016-17 to 2019-20. As with the third grant you must also either   be currently trading - but be impacted by reduced  capacity demand or activity due to coronavirus or   have been previously trading but be  temporarily unable to do so due to coronavirus.

And you must declare that you  both intend to continue to trade   and reasonably believe that you will suffer a  significant reduction in your trading profits   due to reduced activity, capacity / demand  or inability to trade due to coronavirus. We'll see more about reasonable belief in a few  moments. In this example Kevin is a chiropractor.   He usually makes a steady income from his practice  but made a loss in the tax year 2019-20.   He also has some income from  letting out a holiday cottage.

As you can see from the table Kevin made a  profit for 3 years and a loss for one. As   he traded over the 4 years we had the profits  for 2016-17 to 2018-19 together giving us   £140,000 pounds. We then reduce this figure  by £10,000 (which is the loss for 2019-20)   to give us a total profit over the four years of  £130 000 pounds. Dividing this figure by four will   give us his average trading profits over the 4 years of £32,500. 

Kevin's non-trading profits over the  four years equals £50,000. If he experiences reduced capacity  demand or activity due to coronavirus   that he reasonably believes will affect  his trading profits, Kevin would be eligible   because his average trading profit for the four  years is £32,500   which is less than £50,000. The sum  of his trading profits for the four tax years   is £130,000 which is at least equal to the sum of  his non-trading income of £50,000 for those   years. How do we work out partnership eligibility.  If a partnership started trading in 2019-20 made   £100,000 trading profits in that tax year and distributed its profits as   follows: Partner A £25,000 , Partner B £75,000,  Partner A would be eligible for the grant   if he experiences reduced capacity demand or  activity due to Coronavirus that he reasonably   believes will affect his trading profits as the  trading profits are no more than £50,000.    Partner B would not be eligible for the grant  as the trading profits received are more than   £50,000. If partnership rules  require Partner A to pay the grant into   the partnership pot, the partnership should  give the full grant back to Partner A.

What is meant by reasonable belief? In order  to claim you must have reasonable belief   that you'll suffer a significant reduction  in trading profits because between 1 February 2021 and 30 April 2021  you have either reduced business activity   capacity or demand due to Coronavirus or an  inability to trade due to Coronavirus. We'll look   at some examples of what this could mean shortly.  Examples are also available in the full guidance. Before you make a claim you must decide if the  impact on your business will cause a significant   reduction in your trading profits for the tax  year you report them in. For the fourth grant   this could be either tax  year 2020-21 or 2021-22.   HMRC can't make this decision for you because  your individual and wider business circumstances   will need to be considered when deciding  whether the reduction is significant.

You shouldn't take into account previous  SEISS grants or other Coronavirus scheme   support payments you've already received. When  deciding whether you reasonably believe that   you will suffer a significant reduction  in trading profits for SEISS purposes   we expect you to do the right thing and make  an honest assessment that your business has   been sufficiently affected to claim and  to keep appropriate records as evidence for the fourth grant. This applies to your business  if it has been impacted by reduced demand activity   or capacity due to Coronavirus between 1 February and 30 April 2021.   For example, you have fewer customers  or clients than you'd normally expect   resulting in reduced activity due to social  distancing or government restrictions   or you have one or more contracts that have been  cancelled and not replaced or you carried out less   work due to supply chain disruptions. You must  not claim if the only impact on your business  

is increased costs. For example if you've had to  purchase face masks and cleaning supplies, this   would not be considered reduced demand. Businesses  previously trading but temporarily unable to do so.   If you're temporarily unable to carry out  your business activities due to Coronavirus   because for example your business has had to  close due to government restrictions, you've   been shielding or self-isolating in line with  NHS guidelines and are unable to work from home,   if you've been abroad and have to  self-isolate, this doesn't count.   You've tested positive for Coronavirus and are  unable to work or you can't work due to caring   responsibilities, for example, as a result of  school closure or child care facility closures. If you had to close before 1 February 2021 and continue to   be closed for a period of time between 1 February 2021 and 30 April   2021 you can still claim if you're eligible.  Let's see what this looks like in practice. A cafe owner has fewer customers due to government  restrictions which reduces her takings, as her cafe   was open for takeaway only. She reasonably believes  this will significantly reduce her trading profits  

so we'll be eligible to claim the fourth grant. A  plasterer can't get materials due to supply chain   issues because of Coronavirus. This has reduced  the amount of work he can complete and be paid for,   but he manages to quickly find a new supplier.  He doesn't believe that the reduced activity   will cause a significant reduction in his trading  profits, so won't be eligible for the fourth grant. A builder has received a letter from the NHS,  identifying him as clinically extremely vulnerable   asking him to stay at home. As he's unable to work  from home he has a reasonable belief that there   will be a significant reduction in his trading  profits. He is eligible to claim the fourth grant.

A builder has developed Coronavirus  symptoms and self-isolates for five days   before receiving a negative test result.  During those five days he was unable to   work from home but was able to rearrange his  contracts. He doesn't believe there will be a   significant reduction in his trading profits  so won't be able to claim the fourth grant.

An electrician is still trading but has had  increased costs due to buying masks, cleaning   supplies and screens. She is not eligible for  the fourth grant because increased costs were the   only impact on her business and she hasn't lost  customers. A dentist returns from a holiday abroad   and must self-isolate for 14 days due to  quarantine rules. As this is the only impact   on her business she isn't eligible to claim the  fourth grant. This is because reduced demand due   to self-isolation after foreign travel is  not included in the eligibility criteria.

The client of a dog walker cancels  a contract due to Coronavirus.   The dog walker chooses not to look for  additional work to replace the contract.   This means her business activity and her  trading profits are reduced through choice   and not because of Coronavirus so she isn't  eligible for the fourth grant. An I.T. consultant   has other income from renting property from  which he has made losses due to renovation costs.  

This isn't related to his trading profits from  his I.T. consultancy service. As his consultancy   business hasn't been affected due to Coronavirus  he is intelligible for the fourth grant. There are some circumstances that can affect  your eligibility such as: If your return is   late, amended or under inquiry. If you're a member  of a partnership. If having a new child affected   the trading profits you reported for the tax year  2019-20 or means you didn't submit a tax return   for that year. If you have loans covered by the  loan charge and haven't agreed a settlement with  

HMRC before 20 December 2019. If you claim  averaging relief. If you're a military reservist   or if you're non-resident or choose the  remittance basis. See fuel guidance on   for more information on how your  circumstances affect your eligibility.

Now we'll have a look at how  much you might be entitled to. If you meet the eligibility criteria you'll get a  grant based on your average monthly trading profit   over a period of up to four years from 2016-17  to 2019-20 depending on which years you traded in. Earlier SEISS grants were based on average trading  profits for up to three tax years from 2016-17 to   2018-19. As the grant is now based on average  profits over four years including 2019-20.   If your 2019-20 tax return shows an increase  or decrease in your average trading profits   compared to the last three years and you  previously claimed a SEISS grant the fourth SEISS   grant will be a different amount to what you've  previously received. The fourth grant is based on  

80% of your average monthly trading  profits and paid out in a single instalment.   Like the previous grants the fourth grant is based  on three months worth of trading profits capped at   a maximum of £7,500 in total and is subject  to Income Tax and self-employed National Insurance. Trading profits: Trading profits is shown on your   tax calculation as either profits from  self-employment and or partnerships. We'll work out your total trading profit  after deducting any allowable expenses,   flat rate expenses, capital allowances and so on, If your annual gross trading income  from one or more trades or businesses   is more than one £1,000 you  may have used the tax-free allowances   instead of deducting any  expenses or other allowances.

We'll work out your trading profit after deducting  any tax-free allowances. We won't deduct from your   trading profits any losses brought forward from  previous years or your personal allowance. For   profits from self-employment we'll add losses  brought forward from previous years to the   amount shown on your tax return as total taxable  profits from this business. That is the amount  

after expenses have been deducted and not the  trading profits before expenses have been deducted. For profits from partnerships your share  of the partnership's trading profits   is worked out by taking all  partnership income and deducting   anything that is non-trading  income such as investment income. Again any losses brought forward from  previous years will be added to the   amount shown as your share of total taxable  profits from the partnerships business.

Your trading profit after reliable expenses  is shown on your tax return as profit. Here's   an example of trading profit if you've claimed  the trading allowance. For 2016-17 the trading   income is £21,000. No trading allowances have been  claimed meaning the trading profit is also £21,000.  

For the following three years the trading  allowance of £1,000 has been claimed. This means the total profit for each of  these years is reduced by £1,000. If you have more than one  trade in the same tax year   we'll add together all profits and deduct any  losses for all trades when working out your   trading profit. So if the trading profit  for trade one is £60,000 and you   make a loss of £20,000 in trade  two, the total profit is £40,000. If you've traded for all four tax years: To work  out your average trading profit we add together   all profits and deduct losses for all four tax  years where you've had continuous trade and then   divide by four. For example in 2016-17 to 2018-19  your trading profit was £60,000 for each  

of the three years equalling £80,000. In  2019 you suffered a loss of £30,000 which means   the total trading profit for the four years is  £180,000 minus £30,000, giving us £150,000.    To arrive at the average profit for  the four years you need to divide   £150,000 by four to give us £37,500. If you didn't trade in the tax year 2016-17: To work out your average trading   profit we add together all profits and deduct  losses for the three years 2017-18 to 2019-20   then divide by three. In this example the  profits over the three years are added   together which equals £105,000 and then divided by three to   give us an average of £35,000. If you didn't trade in the tax year 2017 to 2018,   we'll work out your average based on tax years  2018-19 and 2019-20 only. Even if you traded in  

the 2016-17 tax year. In this example we don't  consider the profits made in 2016-17. To work out   the average we divide £80,000 by  two to give us an average of £40,000.    Non-trading income: this is the amount recorded  as total income received on your online or   paper tax calculation less your trading  income. This figure does not include losses.

It is important to note that the grant is  also recognised as income for the purposes   of claiming Benefits and Credits including Tax  Credit, Universal Credit and council tax reduction.   If you claim any of these it may  affect the amount you're entitled to.   You'll need to report the grant  as self-employed income for any   Universal Credit claims, self-employed income,  trading profits, for any Tax Credit claims.  

We'll now talk through some examples to help  explain how the fourth grant will be calculated.  The purpose of these examples is to show you how  average trading profits are calculated, you don't   need to calculate anything yourself, HMRC will  work out the amount of the fourth grant for you. Marie is a full-time self-employed mobile  hairdresser who has been trading every   year for the past five years. She has a group of  regular customers including some in care homes   and her income fluctuates very little. She's  been unable to work as a lot of our customers   are vulnerable and current restrictions  are making it hard to get any new business.   In 2019-20 Marie had trading profits of £15,000 and no other source of income.

Marie is eligible for the scheme because: her  trading profits are at least equal to her   non-trading income in this case her only income  is from self-employment. She has average annual   trading profits of no more than £50,000 and  her business is experiencing reduced demand due to   Coronavirus and she reasonably believes this will  have a significant impact on her trading profits.   Having established Marie's eligibility we  now need to work out her average trading   profits in the four years from 2016-17 to  2019-20. Her self-assessment returns show  

profits over the four years of £17,500, £18,750, £17,750 and £15,000.   Marie's total trading profit for the four years  is £69,000. To arrive at the average for   this period we divide this total by four which  equals £17,250.

We now need to work out eighty percent of our  average annual trading profits by multiplying   £17,250 by 0.8 to give us £13,800.   To give us a monthly figure we divide this figure by twelve which equals    £1,150. We'll then work out what that would be for three months by   multiplying the monthly figure by three to give  us £3,450.

Marie will be eligible for the fourth grant equal  to the lower of either £3,450 that is 80% of   our average monthly profits for three months or  £7,500 which is the maximum amount for fourth grant.   Marie is therefore eligible for a fourth grant  of £3,450. Example two: Ali is an actor who's been  working for years and had a big break a   couple of years ago when he landed a role  as a main character on a popular tv show.   He made an investment with his first payment and  received some dividends. However, he's been written  

out of the show last April and the pandemic has  meant very few opportunities for new work since. First we need to work out his average trading  profits in the four years from 2016-17   to 2019-20. His trading profits over the  four years are as follows. £17,000,    £8,600, £49,000 and £69,500. This means Ali's total trading profit  for the four years is £144,100.    He also received £3,500 of dividend income  in 2018-19 and £2,800    pounds in 2019-20. In 2019-20 Ali's trading profit  

is more than £50,000 so he wouldn't meet  the criteria if he'd been trading for only 2019-20.   However, his average annual trading profits  for this period are £36,025.    Ali's circumstances mean he  is eligible for the scheme. Having established his eligibility we  now need to work out 80% of his average annual trading  profits which is £28,820. We then divide this by 12 to give  us a monthly figure of £2,402.

Eighty percent of his profits for a  three month period will therefore be   £7,206. Ali will be eligible for a fourth grant equal  to the lower of either £7,206    which is 80% of his average monthly profits for three months   or £7,500 which is the maximum amount of the fourth grant.   Ali is therefore entitled to a fourth grant  of £7,206. Sophia is in partnership with her spouse selling  goods from fairs and trade shows as well as online.   They've been trading for over ten years and have a loyal customer base.  

However, most of the trading income comes from  the shows which have all been cancelled this year.   First we need to work out the average trading  profits from her share of the partnership   in the four years from 2016-17 to 2019-20. Her  self-assessment tax returns show profits over   the four years of £38,000, £45,000, £49,000 and £48,000.

The total trading profit for Sofia's share  of the partnership for the four years is   £180,000. She also received £3,000 of savings income   in 2018-19. Her average annual partnership  profits over the period is £45,000. Sophia's circumstances means she's eligible for  the scheme. Having established Sophia's eligibility   we now need to work out 80% of her average  annual trading profits which is £36,000.    We'll divide this by 12 to give us a  monthly figure of £3,000. 80% of Sophia's profits for  a three month period will therefore be   £9,000. Sophia will be eligible  for a fourth grant equal to the lower of either  

£9,000 which is 80% of  her average monthly profits for the three months   or £7,500 which is the maximum  amount for the fourth grant.   Sophia is therefore entitled to  a fourth grant of £7,500 . We're now going to go through how  to claim the fourth SEISS grant. You'll be able to claim the fourth grant  until midnight on Tuesday 1 June 2021.

If you're eligible you should receive  the letter text or email from us   with your personal claim date. If we haven't  contacted you about the fourth grant you'll   be able to see if you're eligible as part of the  claim process when you access SEISS claim service. You must make the claim yourself. You must not ask  a tax agent or advisor to claim on your behalf   as this will trigger a fraud alert and will delay  your payment. Claiming online is quick and easy  

using your government gateway account, you can do  it on a smartphone and it only takes five minutes.   This will help keep our advisors free  to help customers who need it most.   Search for Self-Employment Income Support Scheme  on Information needed to make the claim:   To avoid delays, please check that you can log in  to the government gateway before your personal   claim date. Please also check your contact details  are correct in your government gateway account.   If you don't have an account  or have forgotten your details   follow the instructions on by  searching HMRC Services sign in or register. To access the claim tool you'll need your  self-assessment unique taxpayer reference that's   your UTR number, your national insurance number,  your government gateway user ID and password.  

These will be the same as those you used for  your previous SEISS claims if you made any. If this is your first time claiming a SEISS grant  you may be asked additional questions to prove   your identity. These could relate to any of the  following your UK passport your driving licence,   information held on your credit file such as loans  credit cards or mortgages, your self-assessment tax   return within the last three years. It could also  relate to your Tax Credit claim, your P60 or one  

of your three most recent payslips. Please have  this information ready when making your claim.   Your claim may be delayed if you cannot  answer the identity verification questions. You'll be asked to select whether you'd  like your grant paid into a personal   or business bank account. This must be a UK bank  account. Only provide bank account details where  

a bank's payment can be accepted. You'll need to  provide details including the name on the account,   the sort code, the bank account number and  your address link to your bank account. If you use an accountant or tax agent they  must not make the claim on your behalf.  

If your accountant or tax agent tries to claim  on your behalf this will trigger a fraud alert   that will delay your payment and you'll need  to call HMRC to resolve the issue yourself.   However, they can support you to  get ready to make a claim yourself   and suggest other forms of support you may be  eligible for in addition to or instead of SEISS. It's really important that you  protect yourself from fraud.   We're aware of an increase in  scam emails, calls and texts. If someone gets in touch claiming to be  from HMRC saying that financial help can   be claimed or that a tax refund is owed  and asks you to click on a link or to give   information such as your name credit card or  bank details, please do not respond, it is a scam. You can check details of genuine HMRC contacts  on You can also forward suspicious  

emails claiming to be from HMRC to phishing at and you can report text to 60599. So what happens after you've claimed. If your claim is approved it will be paid directly  into your bank account within six working days,   paid in a single instalment. The online system  will let you know how much you will be paid  

and how HMRC calculated that amount  based on your previous tax returns. You must keep a copy of all records in line with  normal self-employment record-keeping requirements   including the amount claimed and  the grant claim reference number. If your business recovers after you've claimed,  this won't affect your eligibility for the grant.   Eligibility is based on your reasonable belief  at the time you made your claim that your trading   profits would be significantly reduced. You  must keep evidence to support your claim.

You must keep evidence that your  business has had reduced demand   due to Coronavirus at the time you made your claim. This includes business accounts showing  reduction in activity compared to previous years,   records of reduced or cancelled contracts or  appointments, fewer invoices, a record of dates   where you had reduced demand or  capacity due to government restrictions. You must keep evidence if your business has been  unable to trade due to Coronavirus. This includes   a record of dates where you had to close due to  government restrictions, track and trace emails   if you've been instructed to self-isolate in line  with NHS guidelines and are unable to work from   home. If you've been abroad and had to self-isolate  this does not count. A letter or email from the NHS  

asking you to shield or test results if  you've been diagnosed with Coronavirus.   You must report any SEISS grant received  on your Self Assessment tax return   as shown on this table. As you can see you have  until midnight on 31January 2022   to report the first, second and third grant  on your online self-assessment tax return and   until midnight on 31 January 2023 for the  fourth and fifth grants. Other support available: You may be able to claim for Universal Credit.  If you make a claim for Universal Credit this   payment may be reduced or stopped if you claim  the cease grant other tax credits and benefits   may be affected too. You should check how tax  credits and other benefits affect each other   and find out what to do if you're already getting  benefits. The government is also providing the  

following help for the self-employed. Grants for  businesses that pay little or no business rates,   business interruption loan scheme, the bounce  back loan and test and trace support payments. The VAT deferral new payment scheme   If you deferred VAT due from 20 March to 30 June 2020   and have been unable to pay in full by 31 March 2021 you can join the VAT deferral new   payment scheme online by 21 June 2021  to pay in monthly interest-free instalments. If you need extra help to pay  contact HMRC by 30 June 2021   and for more information go to and search VAT deferral. Customers unable to pay their tax bill on time can   find more information about  financial support on

We're almost at the end of the webinar  now, so let's just have a quick summary   of what we've covered today. We looked at  an overview of the scheme, who can claim, we had examples of reduced demand or business  unable to trade, how much you may be entitled to,   how to claim the fourth grant, what happens after  you've claimed and what other support is available.   Our full range of help and guidance can be viewed  online from your mobile, tablet or PC at any time. If you have a disability a mental health issue or  don't speak English you can find extra support on   the website. Please only call us   if you can't find what you need on   and wherever possible leave the phone  lines open for those who need us most.  

You should contact HMRC if you need additional  support for instance, if you find it difficult   to use the internet for example, because  you have a disability or you can't easily   access a computer. You can speak to an  advisor on our web chat or call us on 0800 024 1222 Thank you for listening stay safe and stay well.

2021-05-27 19:08

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