Self-Employment Income Support Scheme (SEISS) fifth grant

The Self-Employment Income Support Scheme (SEISS) was designed to help people recover lost earnings if their business has been impacted by the coronavirus crisis.

The government has already released four phases of grants, with the latest one (4th grant) including some 600,000 recent self-employed starters being eligible for the support - unlike the previous three payments.

When will the SEISS 5th grant be available?

A fifth SEISS grant covering May 2021 to September 2021 will be opened to claims from late July 2021. Further guidance for claiming the grant will be available by the end of June 2021.

How the fifth grant is different?

The amount of the fifth grant will be decided by how much your turnover has been reduced in the year April 2020 to April 2021.

More information and support for the self-employed will be provided by the end of June 2021 to help people work out how their turnover was affected.

Who can claim the fifth grant?

The eligibility for SEISS five is the same as it was for the fourth grant.

To be eligible for the grant you must be a self-employed individual or a member of a partnership.

You must have traded in the tax years 2019 to 2020 and submitted your tax return on or before 2 March 2021

You must either:

• be currently trading but are impacted by reduced demand due to coronavirus
• have been trading but are temporarily unable to do so due to coronavirus

What will HMRC look for in your tax returns?

To work out your eligibility for the fifth grant, HMRC will look at your 2019 to 2020 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 to 2020 tax return, HMRC will then look at the tax years 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020.

Is the grant taxable and how will it be paid?

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

How do I decide if I can claim the SEISS fifth grant?

If you intend to claim, you must declare that:

• you intend to continue to trade
• you believe from May 2021 to September 2021, that there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus.

You be required to keep and provide evidence that shows how your business has been impacted by coronavirus resulting in less business activity than normally expected.

It’s up to you to make an honest assessment about whether you believe your business will have a significant reduction in profits.

Also See: Coronavirus Business Interruption Loan Scheme (CBILS)

How much will the fifth SEISS grant be worth?

The government will use a turnover test comparing the year April 2020 to April 2021, as well as your average monthly profits, to determine how much you can claim.

If your turnover has dropped by 30% or more, youll be able to claim the full grant worth 80% of three months’ average trading profits, capped at £7,500.

For those who have seen their turnover fall by less than 30%, youll be able to claim a grant worth 30% of three months average trading profits, capped at £2,850.

When can I claim the 5th grant?

HMRC have said that the online claims service for the fifth grant will be available from late July 2021, although an exact date hasn't been given.

If you’re eligible, HMRC will contact you in mid-July 2021 to give you a date that you can make your claim from. Once you’ve got this communication from HMRC, you should be able to claim. If you don’t hear anything from by late July, but believe you should be eligible, you can contact HMRC.

HMRC will be staggering applications, so be aware that not everyone can apply for SEISS on the same day, as you are given an individual date to claim from HMRC.

What should I do next?

Our advice is sit tight, wait and see if HMRC contact you and if not, speak to us or HMRC directly. If you need advice on whether you will qualify, then contact us today or give us a call and we can advise you.

About the author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.