Self Employed Income Support Scheme (SEISS) – 5th Grant
HMRC have confirmed that there will be a 5th SEISS grant which will cover the 5-month period from May 2021 to September 2021. Although official guidance has not yet been released by HMRC, it is expected that the eligibility criteria will be similar to that of the 4th SEISS grant.
The 5th grant will differ from previous grants by the introduction of a turnover test. HMRC are yet to issue guidance on how this test will be applied, however we do know that the value of the grant will be significantly lower where turnover has reduced by less than 30%.
Where turnover has reduced by 30% or more, the grant will be calculated at 80% of three months’ average trading profits but will be capped at £7,500.
Where turnover has reduced by less than 30%, the grant will be calculated at 30% of three months’ average trading profits but will be capped at £2,850.
As with the 4th SEISS grant, average trading profits are calculated using the tax years 2016/17 through to 2019/20 where the business has traded throughout that period.
The only eligibility criterion which has been confirmed for the 5th grant is that the taxpayer’s Self Assessment tax return for the year ended 5 April 2020 must have been submitted on or before 2 March 2021. Whilst not yet confirmed, it is expected that the remaining criteria will follow that of the 4th grant, as outlined below.
To be eligible for the 4th SEISS grant the taxpayer must:
- Have traded in both 2019/20 and 2020/21 tax years
- Be trading with reduced demand or are temporarily unable to trade due to coronavirus
- Declare that the business intends to continue to trade and reasonably believe there will be a significant reduction in your trading profits
- Have trading profits of £50,000 or less and must be more than or equal to the taxpayer’s non-trading income
- Have submitted a 2019/20 Self Assessment tax return on or before 2 March 2021
The grant will need to be claimed using the HMRC online portal, and it is expected that claims for the 5th grant can be made from late July 2021.
Payments will again be paid in one lump sum following the claim and will be classed as taxable income for the business in the period of receipt.
If you have any questions, please get in touch with your usual Newby Castleman LLP contact.