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SEISS
4 Aug

SEISS 5: THE FINAL GRANT

The portal to apply for the 5th self-employed income support scheme (SEISS) grant opened on 29th July, but not everyone is able to apply at the same time. HMRC has contacted every self-employed taxpayer (by email or letter) who they believe to be eligible to apply for the 5th and final SEISS grant, giving them a personal start date from which they can apply. If eligible, the taxpayer should not attempt to apply before their personal start date as the claim will not be processed. This staggered start is to prevent everyone applying at the same time and crashing the system before HMRC have chance to process the payments.

Who is eligible for the 5th grant?

In advance of opening the claims portal to taxpayers, HMRC has performed a check on the basic eligibility, revolving around whether the 2019/20 tax return was submitted by 2nd March 2021 – as outlined in the Chancellor’s announcement when extending the SEISS.

The taxpayer must make a declaration that they intend to keep trading in 2021/22, and also that their profits will suffer a ‘significant reduction’ due to the impact of COVID-19 in the period 1st May 2021 to 30th September 2021. HMRC have not provided a definition of ‘significant reduction’, however the taxpayer is only required to look forward to estimate their profits for the period ending 30th September 2021. This means that as long as they keep all evidence as to why they believed their profits have reduced (excluding COVID related grants), then they will be able to show reasonable belief at the time of the application that their profits would be down.

SEISS

Before you claim:

Taxpayers may be required to calculate 2 different turnover figures from their business as part of their application. The turnover figure is the gross sales, not profit. This should exclude all COVID-related grants received, such as previous SEISS, CJRS and business rates support.

These figures are only used to determine the level of the grant a taxpayer qualifies for (either at 30% or 80% of average monthly profits), they do not form the basis of the calculation for the grant payment.

The two turnover figures required are:

  • Pandemic period

Irrespective of the date that the taxpayers account are drawn-up to, the turnover for the 12 months ending between 31st March and 5th April 2021 must be reported. For example, between 1st April 2020 and 31st March 2021 or between 6th April 2020 and 5th April 2021.

  • Reference period

This is the turnover for the accounts reported on the 2019/20 tax return, or the 2018/19 return, should your 2019/20 return be unusual – this may be due to maternity leave or an extended period of ill health. If the taxpayer uses an accounting period that ends between 31st March and 5th April, then the figure from the corresponding tax return can be used. However, if a different date is used as the period end, for instance the 30th June, then the reference period will be the 1st July to 30th June.

If you started a business in 2020/21 you should include the turnover received between April 2020 and April 2021, even if this covers less than 12 months.

If you have more than one business as a sole trader, your figure must include the total turnover for all of your businesses.

How does your turnover affect your grant amount?

The online service will ask for the turnover figures as above, and compare them for you. If your turnover is down by 30% or more, your grant will be worked out at 80% of 3 months’ average trading profits, subject to a cap of £7,500.

If your turnover is down by less than 30%, your grant will be worked out at 30% of 3 month’s average trading profits, subject to a cap of £2,850.

Where turnover has not fallen at all, there will be no SEISS grant payable. Therefore, it is important to enter the correct turnover figures relating to the pandemic period and the reference period to ensure you don’t get them the wrong way around!

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