Fifth SEISS Grant complications…

Coronavirus, Sole Trader,

The fifth grant through the Self Employed Income Support Scheme (SEISS) is due to become available later this month. As we mentioned before, this iteration of the grant is going to be different to those that have come before, and it’s looking likely to be far more complicated.

As before, we cannot submit a claim on your behalf, so you may well need to do some homework before you can make your claim!

The background…

Claims one and two – Claimants had to confirm that their business had been ‘adversely affected’ by the pandemic. This was very vague, and there was no real guidance as to what that impact needed to look like.

Claims three and four – Claimants also had to declare that their sales had reduced in the qualifying period, due to Coronavirus, compared to what would usually be expected. No figures were required to support the claim.

Claim five – HMRC has now released its guidance on how to work out turnover for the test that we were warned would be included. It isn’t very logical, and may well be confusing!

What you (currently) need for the fifth grant…

There are two figures that you must have for the claim, which will be compared to verify that you’re eligible.

  1. Your turnover for the year April 2020 to April 2021.
  2. Your turnover for a reference year, against which the 2020 figure will be compared.

You’ll need to enter those figures into the online service when you log into the portal, and it will then confirm whether you qualify.

If your turnover between 2020 and the reference year is down by 30% or more your grant will be:

  • worked out at 80% of 3 months’ average trading profits
  • capped at £7,500

If your turnover between 2020 and the reference year is down by less than 30% your grant will be:

  • worked out at 30% of 3 months’ average trading profits
  • capped at £2,850

Obtaining those two key figures is where the confusion comes in!

Figure 1 – Turnover April 2020 to April 2021.

You’ll need to have your books written up, or your records up to date before you start, to be sure that your figures are accurate. HMRC’s guidance says that they will check your figures against your tax return when it’s submitted so the figures you use need to be right!

Your turnover figure must start on any day from 1st April 2020 to 6th April 2020, and run for 12 months. This obviously won’t necessarily match your trading year, so be careful what figures you are including.

This figure must include all income from all businesses you may have, including any that you started in the year, but should not include:

  • Previous SEISS grants.
  • Any local authority or Business Rates grants you may have received.

Figure 2 – A Reference Year for comparison purposes.

The figure must be a 12 month period and include the total turnover for all of your businesses. In many cases, you’ll be able to use the turnover recorded in your 2019/2020 tax return as your reference year. You’ll find this on your copy of your earlier year return, but if you can’t find out, please ask, as we’ll have copies on file. Alternatively, you can find your earlier returns by logging into your personal tax account online.

However, if your 2019/20 wasn’t a ‘normal’ year for you, you can go back and use 2018/19 as a reference year. HMRC cites the following as examples that would allow this to take place:

  • If you were on carers leave, long term sick leave or had a new child
  • If you carried out reservist duties
  • If you lost a large contract
  • If you are eligible for the fifth grant but did not submit a 2019 to 2020 return

You can read more about how your circumstances can affect your eligibility for any claim here.

Finding these two figures might be awkward, so if you’re unsure, please ask!

It’s vital that the figures you use are correct, as HMRC will check them, and can reclaim any grant if they find the numbers you’ve used were incorrect. Not only that, but they can claim interest and impose penalties if this happens. As with all of the grants and support options, our advice would be to double check your figures before you claim and keep very clear explanations as to why you’ve used those that you have, so that you can easily provide the justifications later.

There is still time for the confusing guidance to be clarified before the portal opens, but it’s important that you start to work on these figures now, so that you can make your claim promptly. If anytime changes, we’ll of course let you know, but if you have any questions, please get in touch.


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