The fifth grant will cover the period May 2021 to September 2021, however, unlike previous SEISS 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.
Details of how the test works is expected to be published with HMRC guidance later this month (June 2021).
As with the fourth grant, the amount is based on an average of trading profits for up to four tax years between 2016/17 and 2019/20. In order to be eligible for the grant, trading profits for either 2019/20 or the four-year average, must be no more than £50,000 and be at least equal to non-trading income.
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.
With the relaxation of coronavirus restrictions on 17 May and the reopening of the economy, I am expecting their to be fewer claims this time round with the exception of businesses that were not or are not able to fully reopen, such as those in the tourism or hospitality sector.
A claim for the fifth grant is expected to be available from late July 2021 for eligible taxpayers.
You will qualify for the fifth SEISS grant if you:
- are self-employed, or a member of a partnership
- have submitted your Self-Assessment tax return for the 2019/20 tax year, on or before 2 March 2021
- Your trading profits must be no more than
£50,000 and at least equal to your non-trading income based on either:
(i) your 2019/20 tax return; or
(ii) the average based on your tax returns for 2016/17, 2017/18, 2018/19 and 2019/20
- have traded in both the 2019/20 and the 2020/21 tax year
- you must either:
(i) be currently trading but are impacted by reduced demand, due to coronavirus
(ii) have been trading but are temporarily unable to do so, due to coronavirus
- must also declare that:
(i) you intend to continue to trade
(ii) you reasonably believe there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus
HMRC have produced examples of what qualifies as reduced activity, capacity or demand, or unable to trade.
HMRC have not provided a definition of “significant” so you will need to decide, based on your wider business circumstances, whether there is a significant reduction in your trading profits.
Amount of SIESS grant:
The amount of SEISS grant available will depend on your average trading profits based on your submitted tax returns for 2016/17, 2017/18, 2018/19 and 2019/20, where available and level of turnover reduction as follows:
- Turnover reduction of 30% or more - 80% of 3 months’ average trading profits, capped at £7,500.
- Turnover reduction of less than 30% - 30% of 3 months’ average trading profits, capped at £2,850.
The applications will be open from a personal claim date, which will be sent to you by HMRC.
Applications opens late July 2021, however, the closing date has not yet been announced.
Applications can be made through HMRC’s online service, using your Government Gateway account credentials. Further details of the online service will be sent to you when you are contacted by HMRC with your personal claim date.