HMRC have just updated the basic information about this fifth and final Self-Employment Income Support Scheme (SEISS) grant. Check out what’s the same, what’s different and see if you’re eligible to make a claim.
When is the fifth SEISS available?
This SEISS grant covers May to September 2021. HMRC says that there will be more details published at the end of June and applications will open towards the end of July.
Is it the same as the fourth SEISS grant?
There are many similarities with the last SEISS grant. It’s only open to taxpayers that are self employed or in a business partnership. It’s considered taxable income and will be paid in one lump sum.
Other eligibility criteria remain the same and are listed below.
The main difference: “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.”
Am I eligible?
The eligibility criteria are quite straightforward:
- You must have been trading in the 2019-20 tax year and submitted your self assessment tax return on time. (Before the 2nd March 2021)
- You must currently be trading and either negatively impacted by COVID-19, or have been trading but are temporarily closed because of the Coronavirus.
- You must have maximum trading profits of £50,000 and they must at least equal your non-trading income
How much can I get?
There are two levels of the 5th SEISS grant available. The division is whether your turnover fell by under or over 30% in the 2020-21 tax year.
- If your turnover between April 2020 and April 2021 has gone down by under 30%, you’ll be able to claim 30% of three months’ average trading profits. This has a cap of £2,850.
- If your turnover between April 2020 and April 2021 has gone down by 30%+, you’ll be entitled to claim 80% of three months’ average trading profits. The maximum grant available is £7,500.
What do I have to do?
This 5th SEISS grant is intended to see you through the next few difficult months. So you need to know that you’re going to keep trading. These grants are to help keep businesses open and contributing to the whole economy recovery. If you intend to close your business, you shouldn’t apply for this grant.
You must also be concerned that you’re going to take a hit on your profits because of COVID-19 restrictions between now and September. Specifically, “there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus from May 2021 to September 2021.”
This is broad, so that as many businesses as possible can benefit. It relies on the honesty of the business owners to make legitimate claims. HMRC are already pursuing people who made false claims against earlier COVID-19 support schemes and will continue to do so.
It’s very important that you keep evidence to show how the pandemic negatively impacted your business. For example, compare takings with previous years’ in the same month, to show how much difference there is between your reasonable expectations and current reality. You also need to be able to explain how the pandemic contributed to this fall in profit.
Basically, keep all your paperwork, think about how you’d explain the reason behind your claim to HMRC, and discuss it with your accountant. Then you can apply, get the money and get it into your business without worrying about future HMRC investigations.