HMRC have recently confirmed that the application system for the fifth grant for Self Employment Income Support Scheme (SEISS), is now open for online submissions.
Can I Claim the Fifth SEISS Grant?
To claim the SEISS 5th Grant, you must declare that:
- you intend to continue to trade
- you believe that there will be a significant reduction in your trading profits due COVID-19, between 1st May 2021 and 30th September 2021.
You must also have traded in the tax years
- 2019 to 2020 (And have submitted your tax return before 2nd March 2021)
- 2020 to 2021
You must also have had trading profits of no more than £50,000 and at least equal to your non-trading income.
As with the previous four SEISS grants, any grant will again be subject to tax and national insurance.
Fifth SEISS Grant Qualifying Conditions
HMRC have tightened up the Qualifying Conditions for the fifth grant, and have now imposed a Turnover test in order to determine your eligibility.
You must calculate
- Your turnover for 2020/21 (April 2020 to March 2021) ; and
- Your turnover for either 2018/19 (April 2018 to March 2019) or 2019/20 (April 2019 to March 2020)
If your accounting year differs to the tax year (e.g. your year end is not 31st March) then you will not be able to use your standard accounts figures and instead must calculate your turnover for the period April to the following March.
If your 2020/21 turnover is down by 30% or more, the grant will be:
- worked out at 80% of three months’ average trading profits; and
- capped at £7,500.
If your 2020/21 turnover is down by less than 30%, the grant will be:
- worked out at 30% of three months’ average trading profits; and
- capped at £2,850.
View HMRC's guidance here
Example 1
Bob has traded for a number of years and believes that he meets all of the qualifying criteria. As such, he does the Turnover test to determine what level of grant he should receive.
- Bob's total turnover was £30,000 for 2019/20.
- His total turnover was £15,000 for 2020/21
This represents a 50% drop in turnover from 2019/20 to 2020/21.
Bob will get the higher grant amount which is worth 80% of three months’ average trading profits, as his turnover is down by 30% or more.
Example 2
Marie started trading in 2019/20 but believes that she meets all of the qualifying criteria for the grant. As such, she does the Turnover test to determine what level of grant she should receive.
- Marie's total turnover was £12,000 for 2019/20.
- Her total turnover was £10,000 for 2020/21
This represents a 17% drop in turnover from 2019/20 to 2020/21.
Marie will get the lower grant amount which is worth 30% of three months’ average trading profits, as her turnover is down by less than 30%.