When Chancellor Rishi Sunak announced on 3rd March 2021 that the Government was going to extend the Self Employment Income Support Scheme (SEISS), which is due to end September 2021, it was welcome news for many self-employed people.

The deadline for claiming the 4th grant closed on 1st June, but the claim process for 5th and final grant is due to open late July 2021.

If you didn’t claim for the 4th grant, you are still eligible for the 5th grant.

The fifth and final SEISS grant will cover lost earnings from May onwards. It works a little different from the first four grants in that it covers 80% of average self-employed profits if your turnover has fallen by more than 30 per cent; however, for those who haven’t been as badly affected you can still get a 30% SEISS grant.

To qualify for the 5th grant, you need to meet all of the eligibility conditions. Normally, this means all of the following:

  • you must carry on a trade which has been adversely affected due to coronavirus
  • you must have submitted your 2019/20 tax return on or before 2 March 2021
  • you must have carried on a trade in 2019/20 and 2020/21
  • you must intend to continue to carry on a trade in 2021/22 at the time you claim the grant

You are unable to claim the 5th SEISS grant if your business has been affected solely because you, or someone you care for, have had to self-isolate in the UK following an overseas trip.

To work out your eligibility for the 5th grant, HMRC will first look at your 2019 to 2020 Self-Assessment tax return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income.

Don’t worry if you have not submitted your 2020/21 tax return yet as you do not need to have filed this tax return with HMRC before claiming the 5th grant.

If you choose to make a claim, you will need your turnover figures for:

1. A pre-covid year, that represents “normal trading”. This should be either 2019-20 or 2018-19. For example, if you were on maternity leave during the 2019/20 tax year the turnover from your 2018/19 tax return may more accurately reflect “normal trading”.

2. Your turnover for a 12-month period starting between 1st April 2020- 6th April 2020.

For businesses with a 31st March or 5th April year end this will be easy to do as it is the same figure you will be declaring on your 2020/21 tax return.

If you have an accounting period which is either not 12 months or does not begin with a date between 1 April 2020 to 6 April 2020, then you will need to choose a date between 1 April 2020 and 6 April 2020 and calculate your turnover for the 12-month period beginning with that date.

In the above calculations, do not include anything reported as any “other income” on your tax return. You should also not include any Covid-19 support payments, for example:

  • Previous SEISS grants
  • Local authority or devolved administration grants
  • Eat Out to Help Out payments

When you make your claim, the online service will ask you for your turnover figures and compare them for you. The claims service will then tell you if you can claim the higher or lower grant amount.

If your turnover is down by less than 30%

Your grant will be:

  • 30% of 3 months’ average trading profits
  • capped at £2,850

If your turnover is down by 30% or more

Your grant will be:

  • 80% of 3 months’ average trading profits
  • capped at £7,500

If you started trading in 2019/20 period and have not been self-employed in any of the 2016/17, 2017/18 or 2018/19 tax years you should receive 80% of your 3 months’ average trading profits, capped at £7,500 (this was the same as the 4th SEISS grant).

The claim process will open from late July and will remain open until 30 September 2021.

HMRC should contact potential claimants in mid-July to explain how you can claim the 5th grant with a personal date for you to apply.

If you are unable to make a claim online then you should call the HMRC SEISS helpline – although do expect the lines to be extremely busy.

Please note a claim for the 5th SEISS grant cannot be amended after the claim process closes on 30 September 2021 and the turnover figure you declare for the 2020/21 period should match the information which is later declared on your 2020/21 tax return to avoid an enquiry from HMRC.

Talk to us

If you need any help making your claim or have any questions on how this impacts your tax return, get in contact with our team on 01474 853 856 or email enquiries@a4g-llp.co.uk

Contact me today!

Mitchell Ewer

ACA

Client Manager & Principal Adviser

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