A fifth SEISS grant covering 1 May 2021 to 30 September 2021 will be open for claims from late July 2021.  If you believe that your business has, or will be, impacted by Covid-19 during this period then you should consider making a claim.  All claims for the fourth SEISS grant have now closed, as of 1 June 2021.

As with the previous grants, HMRC will contact you from mid-July if you are eligible for the fifth SEISS grant based on your tax returns. You’ll be able to use HMRC’s online service to make your claim from late July 2021, until the 30 September 2021 deadline.

How much is the fifth SEISS grant worth?

The amount of the fifth grant will be determined by how much your turnover has been reduced in the 2020/21 tax year.

If your turnover has reduced by 30% or more then you will receive 80% of 3 months’ average trading profits, up to a maximum of £7,500.

If it’s reduced by less than 30%, you’ll get 30% of 3 months’ average trading profits, up to a maximum of £2,850.

The grant is taxable and will be paid out in a single instalment.

Confirming your eligibility for the fifth SEISS grant

Once again you’ll need to confirm your eligibility for the grant.  You must be self-employed or a member of a partnership and you must have traded in both the 2019/20 and 2020/21 tax years. HMRC will first look at your 2019/20 Self-Assessment tax return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income.  If you’re not eligible based on your 2019/20 tax return, HMRC will then look at your previous years’ tax returns.

You must either be currently trading but impacted by reduced demand due to coronavirus, or have been trading but are temporarily unable to do so due to coronavirus.  You must also declare that you intend to keep trading in the 2021/22 tax year, and that you believe your trading profits will be significantly affected during the May-September 2021 period.

The ‘turnover test’

HMRC has tightened up the ‘turnover test’ for the fifth SEISS grant, and you will need to prove your sales have reduced in order to qualify. HMRC has released some guidance on how to calculate your turnover, as there are various steps you need to work through in order to reach the two figures which will be necessary for your application.

These two figures are:

• your turnover from the pandemic period – this is your turnover for a 12-month period starting on any date between 1 and 6 April 2020, excluding any Covid-19 support payments.
• your turnover from the reference period – this is the turnover figure from your 2019/20 tax return, but if this was not a normal year for your business you have the option to use 2018/19 instead.

Unfortunately as accountants we are not permitted to apply for SEISS grants on your behalf, but please let us know if you need help to work out your turnover figures. A lot of the guidance from HMRC seems to throw up more questions than answers, and the rules for partners seem particularly illogical, especially where they are also involved in another business.

Checking your tax return

If you’ve already submitted your 2020/21 tax return online, or if you’ve already claimed an SEISS grant during 2020 or 2021, then you’ll need to check your tax return.

This is because HMRC has started to autocorrect 2020/21 tax returns if any SEISS grant claims don’t match its records. You need to ensure than any adjustment made by HMRC is accurate, as it could affect your pre-claim checks for the fifth SEISS grant.

HMRC may have made an adjustment to your return if:

• the amount of SEISS grant put in the SEISS box doesn’t match HMRC’s records
• the grant was reported on the tax return but in the wrong box
• there was no SEISS amount entered
• an SEISS grant was received but you didn’t submit a Self-Employment or partnership page (SA103 or SA104)

The adjustment (and how to check it) depends on your circumstances and how you submitted your return – full information is available on the Gov.uk website. If we submit your return we will ensure the SEISS grants have been declared in the correct boxes. If you need any help in submitting your return please contact us.