Self-Employed Income Support fifth grant

HMRC has published details of the fifth and final grant under the Self-Employed Income Support Scheme (SEISS grant), which includes a new turnover test to determine the level of the grant.

The grant opened for claims on 29 July 2021.

The grant covers the period from May 2021 to September 2021. 

It is 80% of three months’ average trading profits capped at £7,500 for those whose turnover has dropped by 30% or more. If it is less than 30%, the grant will be based on 30% of three months’ average trading profits, capped at £2,850.

Turnover includes the takings, fees, sales or money earned or received by a business.

Claims must be made by 30 September 2021.

Making a claim

To make a claim, you will need to work out your turnover for 2 periods:

1. Work out your turnover for a 12-month period starting from 1 April 2020 to 6 April 2020.

2. Find your turnover from either 2019/20 or 2018/19 to use as a reference year.

You will need to have both figures ready when you make your claim.

HMRC will compare these figures to work out how much the grant will be.

When you do not need turnover figures to claim

HMRC will not ask for any turnover figures where trading started in 2019/20 and no trade took place in the following tax years:

• 2018/19
• 2017/18
• 201617

How much you will receive

If you need to tell HMRC about your turnover

There are 2 levels of grant. HMRC will work out your grant amount based on how much your turnover has reduced after it has compared the 2 turnover figures.

Example

Average trading profits were £42,000 over the last 4 tax years.

1. Start with your average trading profit (£42,000).
2. Divide by 12 = £3,500.
3. Multiply by 3 = £10,500.

If you are eligible for the higher grant:

1. Work out 80% of £10,500 = £8,400.
2. You will receive the maximum grant of £7,500.

If you are eligible for the lower grant:

1. Work out 30% of £10,500 = £3,150.
2. You will receive the maximum grant of £2,850.

If you do not need turnover figures to claim

You will receive 80% of 3 months’ average trading profits. The maximum grant amount is £7,500.

HMRC has published detailed information on how it works out your trading profits.

How to make a claim

The online service for the fifth grant opened on 29 July 2021. HMRC contacted those eligible in mid-July to provide a date from which a claim can be made.

You can check a list of genuine HMRC contacts if you receive any suspicious texts, calls or emails claiming to be from HMRC as this may be a scam.

How the grant is treated

The grant is subject to income tax and NICs and should be included in your 2021/22 Self Assessment tax return.

Finance Act 2021 taxes SEISS grants received after 6 April 2021 in the year of receipt. 

There is a 100% tax charge where a recipient gets a grant to which they are not entitled.

The grant also counts towards your annual allowance for pension contributions.

SEISS grants are not counted as ‘access to public funds’ and you can claim the grant on all categories of work visa.

Auto-correction of tax returns

HMRC is automatically correcting 2020/21 tax returns where the total amount reported of SEISS grants received in that year does not match its records. It will do this within nine months of the date the tax return being filed and without having to open a formal enquiry.

If you receive a notice from HMRC of a correction, Bishop Fleming should also receive a copy as agent.

Further information

Other government measures already in place to support businesses and workers during the coronavirus emergency can be found in our Business after COVID-19: Transition Knowledge Hub.