Applications for the fifth and final Self Employment Income Support Scheme (SEISS) grant, intended to support self-employed individuals affected by the COVID-19 pandemic, will open on a staged basis from late July to 30 September, covering the period May – September 2021.
The rules for the fifth SEISS grant are largely the same as those for the fourth. However, unlike previous grants, the fifth grant will be determined by a turnover test.
Where business turnover has fallen by 30% in the year April 2020 to April 2021 the grant will be worth 80% of three months’ average trading profits, capped at £7,500. Where turnover has fallen by less than 30% in the same period, the grant will be worth 30% of three months’ average trading profits, capped at £2,850.
Who is eligible for the fifth SEISS grant?
To be eligible for the fifth SEISS grant, you must:
- Be self-employed or a member of a partnership – you cannot claim the grant if you trade through a limited company or a trust
- Have traded in both the tax years 2019-20 and 2020-21
- Have submitted your 2019-20 tax return on or before 2 March 2021
- Have trading profits that are no more than £50,000 and at least equal to non-trading income, based on your 2019-20 tax return or an average of relevant tax years between 2016-17 and 2019-20
- Be currently trading but are impacted by reduced activity, capacity or demand due to COVID-19, or have traded previously but are temporarily unable to do so due to COVID-19
- Declare that you intend to continue to trade, or restart trading, and that you reasonably believe that the impact on your business will cause a significant reduction in your trading profits
These rules are unchanged from the fourth grant.
The turnover test
The turnover test will determine the level of grant received. When making a claim you will need to provide two turnover figures, which are the takings, fees, sales or money earned or received by a business.
You will need to provide:
- Your turnover for a 12-month period starting from 1 April 2020
- Your turnover from either the 2019/20 or 2018/19 tax year to use as a reference year, if 2019/20 was not a normal year
You should ensure that you have these figures available before the claims window opens.
How to work out your turnover
APRIL 2020 TO APRIL 2021 TURNOVER
You will need to work out your turnover for a 12-month period for all your businesses, beginning any date between 1 – 6 April 2020. It is important to ensure the figure is accurate as HMRC will check the figures after your tax return for the period is submitted.
Depending on your accounting date, you can find your turnover figures by referring to your 2020/21 tax return, accounting software, or bookkeeping records.
The turnover figure should not include any previous COVID-19 support payments received, such as SEISS grants, local authority grants, or payments through the Eat Out to Help Out scheme.
A PREVIOUS YEAR’S TURNOVER TO USE AS A REFERENCE YEAR
As above, for the reference year you will need to work out your turnover for a 12-month period for all your businesses.
The turnover figure from your 2019/20 tax return should be used for the reference year in the majority of cases. If 2019/20 was not a normal year for your business, due to long term sick leave, a new child or the loss of a large contract for example, you will be able to use the turnover figure from your 2018/19 tax return. In this case your records will need to demonstrate that 2019/20 was not a normal year for your business.
If you have an accounting period longer or shorter than 12 months because you changed your accounting date, you will need to make an adjustment to work out what your 12-month turnover was.
If you started or closed a business in the reference year, you will need to include the turnover figure even if this is for a period of less than 12 months.
Further guidance on the turnover test, including how to work out your turnover if you are a member of a partnership, can be found here.
Getting ready to claim
From mid-July, HMRC will contact taxpayers by email, SMS or letter where they believe taxpayers may be eligible for the fifth grant. Claims will open in late July and must be made by 30 September 2021.
To make the claim you will need the following information:
- Self-Assessment Unique Taxpayer Reference (UTR) number
- National Insurance Number
- Government Gateway user ID and password
- Account number and sort code for the bank account you want the grant paid into
If you have any further queries or need any further information on the turnover test specific to the fifth SEISS grant, please get in touch.