SEISS claiming the 5th final grant

The claims process for the final Self-Employed Income Support Scheme grant will open next month

The 5^th and final grant under the SEISS will be opened to claims from late July 2021. This grant will cover the five-month period 1 May 2021 to 30 September 2021. To be eligible for the grant you must be self-employed, either a sole trader or member of a partnership.

Conditions to qualify for this grant:

• You must have traded in the tax year 2019-20 and submitted your tax return for that year on or before 2 March 2021 and traded in the tax year 2020-21.
• You must either be currently trading but impacted by reduced demand due to COVID or have been trading but are presently unable to do so due to COVID restrictions.
• To be eligible to claim HMRC will check previous years tax returns to see if your trading profits are no more than £50,000 and at least equal to your non-trading income.
• When claiming you must declare that you will continue to trade and that you reasonably believe that your business activity will be reduced in the period 1 May to 30 September 2021.

 The 5^th grant is different:

The 5^th grant will be determined by how much your turnover has been reduced in the year April 2020 to April 2021, when comparing between the “pandemic period” turnover and the “reference period” turnover.

• If the turnover reduction is 30% or more, you can claim 80% of 3 months’ average trading profits up to a maximum £7,500.
• If the turnover reduction is less than 30%, you can claim 30% of 3 months’ average trading profits up to a maximum £2,850.

What are these two types of turnover?

You will need to provide the following two turnover figures and it is advisable to have these two figures to hand before starting the claim process.

• The pandemic period

This is the turnover during the 12 months starting from between the 1st and 6th April 2020. If your normal accounting period is 12 months to either 31 March 2021 or to 5 April 2021, this will be the same turnover as will be shown on your 2020/21 tax return in your self employed pages.

However, if you have a different accounting period, say to 30 September 2020, you’ll need to work out the turnover by taking 6 months’ sales from 1 April to 30 September 2020 (from one set of accounts) and then the sales from 1 October 2020 to 31 March 2021 (from your next set of accounts).

Turnover should include the turnover from all sole trader type businesses combined but should NOT include the SEISS grants received or any other Govt type grants such as the eat out to help out payments or local authority grants.

It is not necessary for your tax return for 2020/21 to have been submitted before you can make a claim, but the turnover figure will be checked after your return is filed.

• The reference period

In most cases this will be the turnover figure from your 2019/20 tax return, but there is an option to use 2018/19 if 2019/20 was not a normal year for the business. There are provisions to adjust the turnover figure if the accounting period was longer or shorter than 12 months but there is no requirement to make an adjustment if the period covered is less than 12 months because the business started or ceased in that 2019/20 tax year (this can mean that the comparison is not between two 12-month periods).

If you started trading in 2019/20 and did not trade in any of the tax years 2016/17, 2107/18 or 2018/19, you will not be required to provide turnover figures and will receive a grant based on 80% of trading profits.

Partners in a partnership 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:

HMRC say they will contact the self employed in mid-July, i.e. very soon, to give you a date to make your claim, where they consider you have met the basic conditions for making a claim.

We can help

If you need help deciding if you can make a claim or with how to calculate turnover, do contact us on 01737 844322.