HMRC has issued guidance on claiming the fifth and final SEISS grant. We are going to go through the salient points of the HMRC scheme and provide guidance for claiming the grant. Tax Compute can provide further support if required as it is important that the grant is applied for correctly.
Unlike the previous four SEISS grants this fifth grant is determined by how much a self-employed individual believes his turnover will be reduced in the 20/21 tax year.
WHO CAN CLAIM?
- You must be a self-employed individual or a member of a partnership.
- You must also have traded in both tax years 2019 to 2020 and 2020 to 2021
- You cannot claim the grant if you trade through a limited company or a trust.
- You must have submitted your 2019 to 2020 tax return on or before 2 March 2021.
- trading profits of no more than £50,000.
- trading profits at least equal to your non-trading income. (Non-trading income is earnings outside of your business such as pensions or part-time employment)
- HMRC will already have contacted you if you’re eligible for the grant based on your tax returns.
IF YOU CAN CLAIM
- You must tell HMRC that you intend to keep trading in 2021 to 2022
- You reasonably believe there will be a significant reduction in your trading profits due to the impact of COVID-19 between 1 May 2021 and 30 September 2021
MAKING THE CLAIM
You will need to provide turnover from April 2020 to April 2021 and 2019/2020 as the reference year. If 2019/2020 was not a normal year, say due to illness, then you would use 2018/2019 as the reference year. To calculate turnover, refer to your Self-Assessment tax return or accounting software or ask your accountant to provide the numbers. Do not include any previous SEISS grants and local authority grants in your turnover figures.
HOW YOUR TURNOVER AFFECTS YOUR GRANT AMOUNT
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 30% or more, your grant will be worked out at 80% of 3 months’ average trading profits capped at £7,500
- If your turnover is down by less than 30%, your grant will be worked out at 30% of 3 months’ average trading profits capped at £2,850
CALCULATION EXAMPLES
Higher Grant – If you have a total turnover of £50,000 for 2019/2020 and £25,000 for 2020/2021 your turnover is down by 50% compared to 2019 to 2020 so you will get the higher grant amount which is worth 80% of 3 months’ average trading profits because your turnover is down by 30% or more.
Lower Grant – If you have a total turnover of £50,000 for 2019/2020 and £40,000 for 2020/2021 your turnover is down by 20% compared to 2019 to 2020 so you will get the lower grant which is worth 30% of 3 months’ average trading profits because your turnover is down by less than 30%.
As always Tax Compute Accountants are on hand to help clients. Please contact us for a free consultation.