Claiming the Fifth Self-Employment Income Support Scheme (SEISS) Grant
As previously announced a fifth SEISS grant covering May 2021 to September 2021 will be open to claims from late July 2021. HM Revenue & Customs have stated they will be contacting taxpayers they believe to be eligible from mid July 2021. Claims must be submitted by 30 September 2021.
The rules for the fifth grant are similar to the fourth grant in most respects, however, they differ in terms of the level of grant that can be claimed is now dependent on the reduction in turnover of the individual claiming.
Who is eligible?
To be eligible for the grant you must be a self-employed individual or a member of a partnership.
You must have traded in the tax years:
- 2019 to 2020 and submitted your tax return on or before 2 March 2021
- 2020 to 2021
You must also either:
- be currently trading but are impacted by reduced demand due to coronavirus
- have been trading but are temporarily unable to do so due to coronavirus
Your trading profits must be no more than £50,000 and at least equal to your non-trading income for either:
- the tax year 2019/20; or
- the average of the tax years 2016/17, 2017/18, 2018/19 and 2019/20.
When making your claim you must declare that:
- you intend to continue to trade
- you reasonably believe there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus from May 2021 to September 2021
You must keep evidence that shows how your business has been impacted by coronavirus resulting in less business activity than otherwise expected.
How the size of the fifth grant is determined
The amount of the fifth grant will be determined by how much your turnover has been reduced in the year 1-5 April 2020 to 1-5 April 2021.
If your turnover has been reduced by:
- 30% or more – you will receive a grant worth 80% of 3 months’ average trading profits, up to a maximum of £7,500
- less than 30% - you will receive a grant worth 30% of 3 month’s average trading profits, up to a maximum of £2,850.
The Turnover test
To determine the level of grant that can be claimed, two turnover figures will need to be provided during the claims process - you should have these figures ready before you start the process.
1. The pandemic period
The figure required for this period is the total turnover for a 12-month period starting on any date between 1 and 6 April 2020. If you prepare accounts on a tax year basis, you will be able to use the same figure as will appear on the 2020/21 tax return (it’s not necessary to have submitted your return before making a claim). Those who use a different accounting date will need to make a separate calculation. Your turnover figure must include turnover from all of your businesses but should NOT include any coronavirus (COVID-19) support payments, for example:
- previous SEISS grants
- Eat Out to Help Out payments
- local authority or devolved administration grants
2. The reference period
For this period, the turnover figure for a 12-month period from the 2019/20 tax return should be used but there is also the option to use the 2018/19 figure if 2019/20 was not a normal year for the business. If the accounting period was longer than 12 months then there is a provision to adjust this figure but if the period was shorter than 12 months there is no requirement to make an adjustment as the business will have just started – see below.
Those who started trading in 2019/20 and did not trade in any of the tax years 2016/17, 2107/18 or 2018/19 will not be required to provide turnover figures and will receive a grant based on 80% of trading profits.
Partners of partnerships will need to provide turnover figures for the partnership as a whole unless they also have other trades, in which case they can use their share of the partnership turnover.
When can you claim?
If you’re eligible based on your tax returns, HMRC will contact you from mid-July 2021 to give you a date that you can make your claim from.
Author: James Cornthwaite FCA CTA
A former pupil at St Aidan’s C of E High School, James attended Blackpool Sixth Form College and Lancaster University, graduating in 2004, gaining BSc. first class honours. He joined Moore and Smalley, Preston in 2005 and qualified as a...
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