The fifth Self Employment Income Support Scheme (SEISS) grant is set to open for claims by the end of July 2021.
Unlike the previous four SEISS grants, the fifth will differ in terms of how the payouts are calculated.
The fifth SEISS grant will cover the months of May to September 2021. The size of the grant will be determined by how much of your turnover has been reduced in the year from April 2020 to April 2021.
To be eligible for the fifth SEISS grant, you must be a self-employed individual or a member of a partnership.
When must you have been actively trading?
Eligible applicants for the fifth SEISS grant must have been actively trading during the 2019/20 tax year and submitted their self-assessment tax returns on or before 2nd March 2021. You must also be actively trading in the most recent 2020/21 tax year.
Applicants must be trading at the present time but are impacted by reduced demand from COVID-19. Alternatively, applicants may have been trading previously but are temporarily unable to do so because of Covid-19 and any subsequent restrictions.
How HMRC will calculate your eligibility
HMRC will look first at your 2019/20 self-assessment tax return. Trading profits must be a maximum of £50,000 and at least equal to your non-trading income.
If you are not eligible based your 2019/20 tax return, HMRC will instead look back at previous tax years, starting from 2016/17, all the way through to 2019/20.
What to declare when you claim
Applicants must state their intentions to continue to trade, and must also declare that they “reasonably believe” they will suffer a significant loss in trading profits due to Covid-19 between May 2021 and September 2021.
This could include loss of business activity, demand, capacity, or a total inability to trade.
Applicants must also retain evidence of their business’ fall in trading profits. HMRC has requested applicants make an “honest assessment” of the impact of Covid-19 on their businesses between May 2021 and September 2021.
How the fifth SEISS grant is calculated
If your eligible business suffered a reduction in turnover of 30% or more between April 2020 and April 2021, you will be entitled to 80% of three months’ average trading profits, up to a maximum of £7,500.
If your eligible business experienced a reduction in turnover of less than 30% between April 2020 and April 2021, you will be entitled to 30% of three months’ average trading profits, up to a maximum of £2,850.
HMRC will liaise with you directly if you are eligible for the fifth SEISS grant – based on your tax returns – in mid-July, with the online claims platform set to open from the end of next month.
