Applications for the fifth round of the self-employed income support scheme grant (SEISS 5) are due to open in late July. SEISS 5 covers the period May 2021 to September 2021 and eligibility is based on your tax returns. Am I eligible? How much will I receive?
SEISS 5 – How is the grant different and how much will I receive?
The amount of the fifth grant is determined by how much your turnover has been reduced in the year April 2020 to April 2021. Has your turnover decreased in this period? If yes, then the grant amount received will depend upon the amount of the reduction.
- If your turnover has reduced 30% or more, the grant will be worth 80% of 3 months’ average trading profits (capped at £7,500)
- If your turnover has reduced less than 30%, the grant will be worth 30% of 3 months’ average trading profits (capped at £2,850)
More information and support is anticipated by the end of June 2021 to help you learn how your turnover was affected.
For all SEISS grants, HMRC calculate how much eligible individuals will receive so you do not need to calculate the amount you are due – you do need to make a claim to receive funds under the scheme.
Is the SEISS a taxable grant?
Yes! The grant is paid out in a single instalment and is taxable so make sure to remember to include SEISS grant amounts received in your tax return.
How do I know if I can claim SEISS 5? Am I eligible?
Are you a self-employed individual or a member of a partnership?
Have you traded in the years 2019 to 2020 and submitted your tax return on or before 2 March 2021 and traded in the year 2020 to 2021?
If yes, you must also either:
- be affected by reduced demand due to coronavirus and currently trading
- have been trading but are temporarily unable to do so due to coronavirus
Are Tax Returns used to work out eligibility for the fifth SEISS?
Yes, to work out your eligibility for the fifth 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.
If you’re not eligible based on your 2019 to 2020 tax return, then HMRC will look at the tax years 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020.
Mandatory declarations to HMRC about your business activity due to Covid19
You must declare that:
- you intend to continue to trade
- from May 21 to Sept 21 you reasonably believe there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus
Evidence that shows how your business has been impacted by coronavirus resulting in less business activity than otherwise expected, must be kept to back up your application.
HMRC expects you to make an honest assessment about whether you reasonably believe your business will have a significant reduction in profits.
HMRC will contact you in mid-July 2021 to give you a date that you can make your claim from.
Do you expect to receive a refund on your 2020/21 self-assessment tax return?
We have been told that HMRC are manually examining each tax return that details self-employment grant income to check that the information is correct. This may delay refunds that become due as a result of the submission of your 2020/21 self-assessment tax return.
HB Accountants is here to help you find optimum tax efficiency: giving you access to experienced accountants, tax specialists and useful information and support no matter your business size or sector. If you would like a no obligation discussion about how we can help you, please feel free to contact the team on 01992 444466. We’re accountants for business and we’re here to help you grow.
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The information contained above is for general guidance purposes only. Whilst every effort has been made to ensure the contents are accurate, please note that each individual has different circumstances and it is essential that you seek appropriate professional advice before you act on any of the information contained herein. HB Accountants can accept no liability for any errors or omission or for any person acting on or refraining from acting on the information provided in the above