The Self-Employed Income Support Scheme (SEISS) has been the main source of government funding for self-employed individuals affected by the Covid-19 pandemic. The portal for claiming for the 5th grant is now open and will close on 30th September 2021.
This latest SEISS grant’s rules are broadly similar to those for grant four, with the main difference being the introduction of the new turnover test, which determines how much you can claim. Special rules apply for partnerships.
Please note that you can only claim the SEISS grant if your business has been adversely affected by COVID-19.
Calculating your SEISS grant
When making your claim for the 5th SEISS grant, in most cases you will now need to provide HMRC with your business turnover so that they can work out your grant amount. You will need to supply two different turnover figures (April 2020 – April 2021 and either 2019 to 2020 or 2018 to 2019). HMRC will then work out your grant amount based on how much your turnover is down by after they have compared your two turnover figures.
|
How much your turnover is down by |
What you’ll get |
Maximum grant amount |
|
30% or more |
80% of 3 months’ average trading profits |
£7,500 |
|
less than 30% |
30% of 3 months’ average trading profits |
£2,850 |
Your turnover
You will need to work out your turnover for a 12-month period, starting on any date from 1 to 6 April 2020. Your turnover will cover your takings, fees, sales and money earned by your business. If you have more than one business as a sole trader, your figure must include the total turnover for all of your businesses. This turnover figure excludes any ‘coronavirus support payments’ such as previous SEISS grants, Eat Out to Help Out payments and local authority or devolved administration grants.
The ‘reference period’
HMRC uses the ‘reference period’ as the tax year 2019-20. However, you can use the tax year 2018-19 if you feel that this more accurately reflects your turnover for a typical 12-month period. This can be particularly appropriate if you have lost a large contract, were on carers’ leave, long-term sick leave, had a new child or were on reservist duties.
Different accounting periods
If your accounting period is longer than 12 months, you will need to work out what your 12-month turnover was. Likewise, if you have changed your accounting date and therefore have a period shorter than 12 months, you will need to provide figures for your 12-month turnover. If you started or ceased trading in your reference year, you will need to provide trading figures for this year, even if this is for a period shorter than 12 months.
Where to find your turnover on your tax return
There is a box for turnover on your tax return. If you submit a paper return, the box is different depending on which Self-Assessment sections you complete. For section:
- SA200 it is box 3.6
- SA103S it is box 9
- SA103F it is box 15
- SA800 it is box 3.24 or 3.29 (for partnerships)
How the grant is treated
The grant is subject to Income Tax and self-employed National Insurance Contributions. It must be reported on your 2021 to 2022 Self-Assessment tax return. The grant also counts towards your annual allowance for pension contributions.
Partnerships
There are special rules for partnerships. If you are a member of a partnership, with no other business, you will need to use the partnership’s total turnover figure. However, if you have another business as well as being a member of a partnership, you will need to include your percentage share of the partnership’s turnover for each partnership. This will be the same as the percentage of profit you took from each partnership in this year. You must add this to the turnover figure from your other businesses.
Get in touch to find out more
The new rules for the 5th SEISS grant make it more complex to claim for those who trade in a partnership, people who prepare accounts to a date other than 31st March or 5th April and particularly those who have suffered a reduction in turnover of around 30%. Please do get in touch with the team at DRG Chartered Accountants if you have any questions about SEISS and calculating your turnover for the grant claim.
Please note that you will have to make the SEISS grant yourself – and that we at DRG Chartered Accountants cannot make the claim on behalf of our clients.
For further information
Gov.uk website: Claim a grant through the self-employment income support scheme
Gov.uk website: Work out your turnover so that you can claim the 5th SEISS grant
DISCLAIMER: This information is for guidance only, and professional advice should be obtained before acting on any information contained herein. We will not accept any responsibility for loss to any person as a result of action taken or refrained from in consequence of the contents of this publication.
