A fifth grant covering May 2021 to September 2021 will be open for claims from late July 2021. If you are eligible based on your tax returns, HMRC have advised that they will contact potential claimants from mid-July 2021 to give you a date that you can make your claim from.

In most respects the rules for the fifth SEISS grant are the same as for the fourth grant. What has changed is that the level of the grant depends on whether turnover has dropped by more or less than 30%.

Eligibility

Only self employed individuals or a member of a partnership are eligible for the grant (not those who trade through a limited company or a trust).

The claimant must have traded in both the 2019/20 and the 2020/21 tax years and the 2019/20 tax return must have been submitted to HMRC on or before 2 March 2021. Additionally, the claimant must either:

  • Be currently trading but is impacted by reduced demand, activity or capacity due to coronavirus.
  • Have been trading but is temporarily unable to do so due to coronavirus.

The claimant must also declare that they:

  • Intend to continue to trade.
  • Reasonably believe there will be a significant reduction in their trading profits due to the impact of coronavirus in the period from 1 May 2021 to 30 September 2021. HMRC will expect evidence to be kept to support this.

HMRC have provided examples of what is meant by impacted by coronavirus for the purposes of eligibility for the grant and can be found HERE.

As with previous claims, no claim can be made where trading profits exceed £50,000 or are less than non-trading income received. HMRC will first apply this test to the 2019/20 tax year, based on the submitted tax return, and if the eligibility test is not met they will then apply it to average trading profits from the 2016/17 to 2019/20 tax years.

What you need to make a claim

Claimants will need to provide two different turnover figures on the claim; which you should ensure you have available before starting the claim.

  • A 12 month period beginning between 1 or 6 April 2020 and ending on 31 March 2021 or 5 April 2021 (the impacted period). 
  • The figure submitted on your 2019/20 tax return or 2018/19 if 2019/20  was not a normal year for you (the reference period).

Those who prepare accounts on a tax year basis will be able to use the same figure as will appear on the 2020/21 tax return for the impacted period. There is no requirement to have submitted the 2020/21 return before making a claim, but the turnover figure used will be checked after the return is filed.

If you have a different accounting date you will need to make a separate calculation. For example if you have a 30 April 2021 year end, you would take 11/12ths of the turnover to 30 April 2021 and 1/12th of the turnover to 30 April 2020.

HMRC will compare the impacted period to the reference period to determine how much grant will be paid.

How much you can claim

This will depend on how much the turnover has been reduced:

• 80% of 3 months average trading profits, capped at £7,500 for those with a turnover reduction of 30% or more.

• 30% of 3 months average trading profits, capped at £2,850 for those with a turnover reduction of less than 30%.

The grant will be subject to Income Tax and National Insurance Contributions and must be reported on claimants 2021/22 tax returns.

Deadline for applications

The online service for applications will be available from the end of July until 30 September 2021.

If you have any queries please contact your Thomas Westcott advisor.

By Denise Harris, Director