As most self-employed people are probably well aware by this point in the pandemic, SEISS stands for Self-Employment Income Support Scheme. SEISS payments take the form of a taxable grant available to eligible self-employed people who have been impacted by COVID-19.
There have been four grants available so far, and the online service to claim the fifth and final grant opened on Wednesday 28th July 2021. Those eligible to apply would have been contacted by HMRC, this will include a personal claim date, which is the date you can apply for the grant from. The grant covers the period from 1 May 2021 to 30 September 2021 and will be paid as a single lump sum. All claims must be made on or before 30 September 2021. HMRC should contact you by email, SMS or letter to let you know if you’re eligible based on your tax returns, but it’s up to you to determine how you have been impacted by the pandemic.
So, who is eligible for the fifth SEISS grant?
If you think that the profit from your business (as a self-employed person or as a member of a partnership) will be impacted by COVID-19 between 1 May 2021 and 30 September 2021, then you may be eligible to make a claim. However, first, you or your accountant must look at the three stages of eligibility to see if you meet all of the criteria.
Your trading status and when you have traded
As mentioned already, you must be a self-employed individual or a member of a partnership The scheme is not open to you if you trade through a limited company or trust. In addition to this, you must have traded in both of the following tax years:
– 2019 to 2020;
– 2020 to 2021.
Tax returns and trading profits
If you satisfy the first set of criteria, the second set looks at your tax returns and trading profits. You must have:
– Submitted your 2019/20 tax return on or before 2 March 2021;
– Trading profits of no more than £50,000;
– Trading profits that are at least equal to your non-trading income, which is any money that you make outside of your business, such as a part-time job or pension.
If you aren’t eligible based on your 2019/20 tax return, HMRC will take a look at previous years.
Deciding if you can claim
Now, for the first two sets of criteria, HMRC can check on your behalf without you doing anything and, if you meet them then they’ll be in touch. However, it is then down to you to decide if you meet the third set of criteria. For this, you must confirm to HMRC (by making a claim) that you:
– Intend to continue trading in 2021/22;
– Reasonably believe that your trading profits for between 1 May 2021 and 30 September 2021 will be significantly reduced due to COVID19.
You will be expected to keep evidence that demonstrates how your business has been impacted during the period in question and there are strict guidelines on what constitutes a reasonable belief, impact and significant reduction. For instance, you can’t claim if the only impact on your business is increased costs. The full guidelines are available on GOV.UK. If you believe you satisfy the full criteria then you can make a claim.
Let’s talk turnover
The fifth SEISS grant is a bit different to the previous four as you’ll need to tell HMRC about your business turnover so that they can work out which level of grant you are eligible for. This includes takings, fees, sales or money earned/received by your business. You’ll need to provide HMRC with two different turnover figures:
– April 2020 to April 2021;
– Either 2019/20 or 2018/19.
HMRC will compare these figures to work out your claim amount. You can find out how to work out your turnover here. You will not need to supply turnover figures if you began trading in 2019/20 and did not trade in 2018/19, 2017/18 or 2016/17.
How much money will you get?
If your claim is successful, there are two levels of grant depending on your turnover comparison.
– If your turnover is down by 30% or more you’ll get 80% of three months’ average trading profits, capped at £7,500.
– If your turnover is down by less than 30% you’ll get 30% of three months’ average trading profits, capped at £2,850.
– If you don’t need to supply your turnover figures, you’ll get 80% of three month’s average trading profits, capped at £7,500.
How do you claim the fifth SEISS grant?
If HMRC deems you are eligible, they should contact you with the link to apply and your personal claim date. If your claim is successful, it will be paid to your nominated bank account within six working days. If you have not yet heard from HMRC, you can check if you are eligible to claim here.
