Earlier this year, the government announced that a fifth Self Employed Income Support Scheme (SEISS) grant would be made available. HMRC invited claims to be made from late July 2021 in a similar way to the fourth SEISS grant. Claims must be submitted online and are subject to a deadline of 30 September 2021. The grant is available to those who were unable to claim the first three grants, and it covers the trading period from 1 May 2021 to 30 September 2021. Claimants of the fourth grant are also eligible for this fifth grant.
Self-employed individuals and members of a partnership are potentially eligible for the fifth SEISS grant where the taxpayer:
- Carried on a trade in both the tax years 2019/20 and 2020/21.
- Filed a 2019/20 Self-Assessment tax return by 2 March 2021.
- Intends to carry on trading in 2021 and 2022.
- Believes that their trading profits were (or will be) impacted by the coronavirus disruption between 1 May 2021 and 30 September 2021.
The taxpayer’s trading profits must be no more than £50,000 and must account for at least half of their total income for either:
- the 2019/20 tax year; or
- the average of the tax years 2016/17, 2017/18, 2018/19 and 2019/20
This above criteria is unchanged from the fourth grant, but a new turnover test has been added.
What additional information will I need to provide in order to claim for the fifth SEISS grant?
In addition to the details previously mentioned in previous SEISS applications, HMRC now requires two different figures to work out how much your fifth SEISS grant should be:
- The individual’s turnover for the year between 6 April 2020 and 5 April 2021.
- The individual’s turnover for either the 2019/20 or 2018/19 tax years.
However, HMRC will not ask individuals for turnover figures if they started trading in 2019/20 and did not trade in the years 2018/19, 2017/18, or 2016/17.
Level of grants
HMRC will calculate the value of the grant based on the information submitted. The taxpayer can expect a grant equal to 80% of three months’ average trading profits, up to a limit of £7,500, where their turnover has reduced by 30% or more over the 5 month period compared to the turnover figures provided. Where an individual’s turnover has reduced by less than 30%, a grant based on 30% of three months average trading profits, capped at £2,850, will be awarded instead.
How the grant is treated
The fifth grant must be reported on the 2021/22 tax return and is subject to income tax and self-employed national insurance contributions.
Should you have any queries please do not hesitate to contact Thomas Furnell or your usual Kilsby and Williams contact.