Fifth Self Employment Income Support Scheme (SEISS) Grant

A fifth Self Employment Income Support Scheme (SEISS) grant will be made available from late July 2021. The grant is taxable and will be paid out in a single instalment.

What period does this grant cover?

The fifth grant covers the period from May 2021 to September 2021.

When can I make a claim?

The online claims service for the fifth grant will open in late July 2021 and will close on 30 September 2021.

If you are eligible based on your tax returns, HMRC will contact you in mid-July 2021 to give you a date that you can make your claim from.

If you cannot make the claim online, you will be able to contact HMRC by telephone on 0800 024 1222 on Monday to Friday between 8am and 4pm.  The lines may be busy and you will probably have to hold for a while before you can speak to an advisor.  Note that you must wait until HMRC contact you to advise that you can make a claim before phoning them.

Unfortunately, as for previous grants HMRC will not allow us to make the claims on behalf of our clients as this could trigger a fraud alert and delay the processing of the claim.  However, we can assist you to work out the turnover figure that you will need to make any claim.

How will HMRC work out if I am eligible to make a claim?

HMRC will look at your 2020 tax return. Your trading profits must be no more than £50,000 and at least equal to or more than your non-trading income.

If you are not eligible based on your 2020 tax return, they will then look at the tax returns for the 2017, 2018 and 2019 tax years.

What are the conditions for applying?

To be eligible for the fifth grant you must be a self-employed individual or a member of a partnership. You cannot claim the grant if you trade through a limited company or a trust.

You must have traded in:

• 2019 to 2020 and have submitted your 2020 tax return on or before 2 March 2021 and
• 2020 to 2021

You must 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

You must also declare that you:

• intend to continue to trade
• reasonably believe there will be a significant reduction in your trading profits

In order to claim the fifth grant, you must reasonably believe that you will suffer a significant reduction in trading profits, due to reduced business activity, capacity, demand or inability to trade due to coronavirus between 1 May 2021 to 30 September 2021.

You cannot make a claim if the only impact on your business is increased costs as this would not be considered to be reduced activity, capacity or demand.

You will need to keep evidence that shows how your business has been impacted by coronavirus resulting in less business activity than otherwise expected.

HMRC have set out detailed guidance about these conditions, along with examples, on the following webpage which you should read BEFORE making any claim.

 https://www.gov.uk/guidance/how-your-trading-conditions-affect-your-eligibility-for-the-self-employment-income-support-scheme

HMRC have advised that you should wait until you do have reasonable belief that your trading profits are going to be significantly reduced before making any claim.

How much will the grant be worth?

As for previous grants the amount that you will receive will be based on a percentage of average trading profits. The percentage will depend on the amount of reduction in turnover:-

Turnover reduction	How much you will get	Maximum grant
30% or more	80% of 3 months’ average trading profits	£7,500
less than 30%	30% of 3 months’ average trading profits	£2,850

 

How is the reduction in turnover calculated?

The amount of the fifth grant will be determined by how much your turnover has been reduced in the year April 2020 to April 2021.

You must

1. Work out your turnover for a 12 month period starting from 1 April 2020 to 6 April 2020 and

2. Find your turnover from either 2019/2020 or 2018/2019 to use as a reference year.

You will need to have both these figures to hand when you make your claim. 

1. How to work out your turnover for a 12 month period starting from 1 April 2020 to 6 April 2020

You need to work out your turnover for a 12 month period. Your 12 month period must start on any day from 1 April 2020 to 6 April 2020.  This figure must include the turnover from all of your businesses, including any new businesses started between April 2020 and April 2021.

Where to find your turnover figure 

• from your 2021 tax return, if this has already been completed and your accounting period started between 1 April 2020 and 6 April 2020
• check your accounting software (if you use any)
• go through your bookkeeping or spreadsheet records that cover your self-employment invoices and payments received
• check the bank account you use for your business to account for money coming in from customers/clients
• ask us to assist you with this

Your turnover figure must not include 

• anything reported as any other income on your tax return, such as any coronavirus (COVID-19) support payments
• previous SEISS grants
• Eat Out to Help Out payments
• Local Authority or devolved administration grants

Members of Partnerships 

• If you are a member of a partnership and have no other businesses you will need to work out and use the partnership’s total turnover figure.

• If you are a member of a partnership and also have another business, for each partnership, you will need to work out and include your percentage share of the partnership’s turnover. This will be the same as the percentage of profit you took from each partnership in your reference year, even if your profit share percentage changed in 2020 to 2021. You should add this to the turnover from your other businesses.

• If you joined a partnership between April 2020 and April 2021 and have other businesses

You will need to work out your share of the turnover. It should be the same percentage of profit you took from the partnership in the 12-month period, April 2020 to April 2021. You should add this to the turnover from your other businesses. 

The calculation of the turnover figure needs to be accurate as HMRC will be able to check this when you submit your tax return covering this period.  We can assist you with the calculation, although we cannot make the claim for you. 

Note that you do not need to have submitted your 2021 Self-Assessment tax return to be able to calculate your turnover to claim the fifth SEISS grant. However, you should ensure that your records are up to date so that the turnover information for the year April 2020 to April 2021 is readily available.

If you think that you will be eligible to make a claim, we would urge you let us have the information to prepare your 2021 tax return as soon as possible. This will make it easier for us to check that HMRC calculate the correct amount due to you and to assist you with the calculation of the turnover figure required for April 2020 to April 2021.

2. How to find your turnover from either 2019/2020 or 2018/2019 to use as a reference year 

In most cases, you must use the turnover reported in your 2019 to 2020 tax return as a reference year. The figure needs to be based on a 12-month period and include the total turnover for all your businesses.

If 2019 to 2020 was not a normal year for your business, you can use the turnover reported in your 2018 to 2019 tax return. Your records should show how 2019 to 2020 was not a normal year for you.

For example, if you:

• were on carers leave, long term sick leave or had a new child
• carried out reservist duties
• lost a large contract
• are eligible for the fifth grant but did not submit a 2020 tax return

Again, we can assist you with finding this figure although we cannot make the claim for you.

https://www.gov.uk/guidance/work-out-your-turnover-so-you-can-claim-the-fifth-seiss-grant

 Beware of scammers 

The only way to access the scheme will be via the Gov.UK website or by calling HMRC.

HMRC have advised that to protect against error and fraud, they plan to contact up to 27,000 people potentially eligible to apply to undertake a pre-claim check before the fifth SEISS grant opens.

They will write to these people to let them know that they will phone them on the number they provided in their 2020 Self-Assessment tax return to check their identity and business activity.

Those affected will need to provide one form of identity and three months’ worth of UK bank statements from the 2019-2020 tax year in order to claim under the SEISS scheme.

You can read more about the scheme here: –

https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

 https://www.gov.uk/guidance/how-different-circumstances-affect-the-self-employment-income-support-scheme

The information in this blog provides only an overview of HMRC guidance and legislation in force at the date of publication and no action should be taken without consulting the detailed HMRC guidance and legislation or seeking professional advice.  Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this blog can be accepted by the firm.

Photo by Chris Lawton on Unsplash