The fifth grant, which covers the period 1 May 2021 and 30 September 2021, can be applied for online on HMRC’s website.
Unlike previous SEISS grants, these grants will be determined by how much a trader’s self-employment turnover has been reduced in the 2020/21 tax year.
Despite the grant covering a period of five months, the level of grant will only be worth 80% of three months’ average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more.
For those with a reduction in turnover of less than 30%, the grant will be worth substantially less at 30% of three months average trading profits, capped at £2,850.
HMRC will require two years’ worth of turnover figures to enable them to calculate the grant amount, being:
- Your turnover for the period April 2020 to April 2021; and
- Your turnover from either 2019 to 2020 or your turnover from 2018 to 2019 to use as a reference period.
HMRC have provided guidance on their website on how to calculate the turnover figure and the periods which it should cover. The calculations are more complex than the previous grant claims, therefore, if you require any assistance please do feel free to contact us to discuss your position.
Turnover includes the business takings, fees, sales or money earned or received but will exclude previous SEISS grants, Eat Out to Help Out payments and local authority/devolved administration grants.
Your turnover figures can be obtained from either your self-assessment tax return, accounting software, booking keeping or bank accounts records. If you have an accountant, they should also be able to help provided they have your business records.
Taxpayers will be required to make an honest assessment that there has been a significant reduction in trading profits during the grant period, due to reduced demand or their inability to trade due to coronavirus.
HMRC are likely to be checking grants, therefore, it is strongly recommended for applicants to keep detailed and robust records evidencing the impact of coronavirus on the business.
As with the previous SEISS support, the grants are taxable and the fifth grant will need to be included on your 2021/22 tax return. It is recommended that applicants save a copy of the grant calculation and check this to confirm the level of the grant is in order.