Self Employed Income Support Scheme – fifth SEISS grant opens for applications
Self Employed Income Support Scheme, the fifth and final self-employed grant for the self-employed impacted by Covid-19 is now open to applicants.
For the first time, the amount of this self-employed grant will depend upon how much turnover has been reduced in the 2020/21 tax year, with the payment based on average trading profits. As many self-employed people may not have yet calculated their turnover or trading profits for this period (Self Assessment tax returns for this period are not due to be submitted until 31 January 2022), this may add an extra layer of complexity for many in working out their eligibility.
What is the fifth Self Employed Income Support Scheme (SEISS) grant?
The fifth SEISS grant is the final payment in this scheme, which is worth up to £7,500 and is being made available to support eligible self-employed individuals (and members of a partnership) impacted by COVID-19.
Who can claim the fifth Self Employed Income Support Scheme (SEISS) grant?
A self-employed person or a member of a partnership can claim the fifth SEISS grant, if they reasonably believe that their business profits will be impacted by COVID-19 between 01.05.2021 and 30.09.2021.
When making a claim, applicants will also have to confirm that they meet other eligibility.
There are three stages to the SEISS claim that must be satisfied to be able to claim the grant are as follows:
Stage 1: Trading status and trading period
- In order to claim, you must be a self-employed individual or you must be a member of a partnership.
- You must have also traded in the 2019/20 and the 2020/21 tax years
- The grant cannot be claimed if trade was through a limited company or a trust.
Stage 2: Trading profits and tax returns
- To claim, your 2019/20 tax return must have been submitted by 2 March 2021
- You must not have trading profits of no more than £50,000
- Your trading profits must be at least equal to any of your non-trading income
For those who are not eligible based on trading profits in their 2019/20 return, HMRC will consider previous years.
Stage 3: Deciding if you can claim
To claim, you need to confirm that the following is correct:
- You intend to remain trading in 2021/22
- You must have reasonable belief that a significant reduction in your trading profits will occur between 01.05. 2021 and 30.09.2021 due to the impact of COVID-19
What can affect eligibility for the fifth Self Employed Income Support Scheme (SEISS) grant?
If for the tax year 2019/20 your Self Assessment tax return was submitted on or after 3 March 2021, you will not be able to claim.
In calculating eligibility or the amount of loan receivable, HMRC will not consider Self Assessment tax returns for the tax years 2016/17, 2017/18 or 2018/19 if these were submitted on or after 03.03.2021.
Other circumstances that should be taken into account can be found on gov.uk here.
What information do you need to claim the fifth Self Employed Income Support Scheme (SEISS) grant?
If all the above eligibility has been satisfied, turnover will need to be assessed.
To make a claim, turnover figures will be required:
- April 2020 – April 2021, and:
- Turnover from either 2019/20 or 2018/19 to use as a reference year
HMRC will compare these figures to ascertain what level of grant may be payable
The exception to this is if you started trading in 2019 to 2020 and did not trade in all of the following tax years: 2018/19, 2017/18 and 2016/17. In this case, turnover figures are not required.
Further information on how to work out turnover is available at gov.uk here.
How much is the fifth Self Employed Income Support Scheme (SEISS) grant?
The amount of grant which you are eligible to claim depends on whether you need to inform HMRC of your turnover (and if you do, the amount turnover is down by).
If you only traded in 2019 to 2020 and turnover is down (by any amount)
|What you are entitled to||Maximum grant amount|
|80% of 3 months’ average trading profits||£7,500|
For other eligible scenarios
|How much turnover is reduced by||What you are entitled to||Maximum grant amount|
|30% or more||80% of three months’ average trading profits||£7,500|
|less than 30%||30%of three months’ average trading profits||£2,850|
Is the Self Employed Income Support Scheme (SEISS) grant taxable?
Income Tax as well as self-employed National Insurance contributions in payable the SEISS grant.
It must be reported on the recipients’ 2021 Self Assessment tax return.
In addition, the SEISS grant counts towards a person’s annual allowance for pension contributions.
How and when can you claim the fifth Self Employed Income Support Scheme (SEISS) grant?
The fifth SEISS grant has now opened for applications.
HMRC has been contacting eligible applicants from July 2021, providing personal claim dates, where they have identified that they believe individuals are eligible. Guidance explains that claims should be made on or after individuals personal claim dates.
After a successful claim, payment can take up to six working days, but individuals should wait at least ten days, before contacting HMRC.
A claim should only be made on or after the personal claim date which HMRC should provide you with. Once you have this, a claim can be made on gov.uk here. You will also require your Self Assessment Unique Taxpayer Reference (UTR), your National Insurance number and a HMRC online services account.
HMRC has issued a warning not to reply to any suspicious texts, calls or emails to avoid being a victim of a scam. A list of valid HMRC contacts can be accessed here. For added piece of mind, HMRC can also be contacted here.
If you haven’t heard from HMRC within a few weeks, it is recommended you contact them direct to check when you should apply.
What is the deadline for claiming the fifth Self Employed Income Support Scheme (SEISS) grant?
The deadline for claiming the fifth grant is 30 September 2021. To avoid any delay or problems when completing or submitting the claim correctly, it would be prudent to submit a claim as soon as you are able to.
Further information on the fifth SEISS, including how to claim is available on gov.uk here. Additionally, specific information regarding how HMRC works out trading profits and non-trading income can be accessed here.
How can Alexander & Co help?
Should you require assistance with Self Assessment tax returns, calculating business profits or preparing business accounts our team of accountants and tax advisors are able to help. Please use the form below to contact us and we will be happy to discuss with you how we can work with you.