Are you eligible for the 5th SEISS (Self Employment Income Support Scheme)?
WELCOME TO OUR FRIENDLY GUIDE TO THE LATEST
SEISS GRANT #5
IF YOU’RE SELF EMPLOYED, DON’T IGNORE THIS!
There’s some changes to the scheme. We’ve looked into this and here’s the summary.
They are basing it on whether you’ve had a drop in TURNOVER compared to the previous year.
Unless you only started trading recently (ie during the April 2019 to April 2020 tax year) AND ARE STILL TRADING, so you only have one full year of trading figures. In which case you will not have to submit figures and will be eligible for 80% of three months averaged trading profits from that period up to a max of £7500.
*AND only if you think that your business profit will be impacted by coronavirus (COVID-19) between 1 May 2021 and 30 September 2021*
If you’ve been trading for a few years, there’s an interesting little twist here : They will use the figures from
- April 2020 to April 2021
- AND either 2019 to 2020 or 2018 to 2019
For most people the previous years figures (ie April 2019 to April 2020) will show relatively normal trading so if that’s the case, let them use that. If however, you had a marked drop off from earlier last year (ie Jan – April) contact them to ask them to use this earlier year.
BUT they will use the trading profits for all the years since 2016 to calculate your profit average for three months.
‘Show me the Money’
Here’s what your turnover figures will mean:
If it’s less than a 30% drop you get 30% of three months averaged TRADING PROFITS (up to a max of £2850)
If it’s more than 30% you can get 80% of three months averaged TRADING PROFITS (up to a max of £7500)
So they are using your turnover figures to see if you’re eligible and your profit figures to determine how much you’re eligible for.
You will be hearing from the revenue around now if they think you are eligible. HMRC will contact you in mid-July to give you a date that you can make your claim from. It will be given to you either by email, text message, letter or within the online service. Here’s a list of official sources to help against fraud.
Word of warning. If they are actually wrong (someone we know had this) and you weren’t eligible, it’s not in your interest to take the money and run. They will ask for it back!!
So even if they contact you, please check you are eligible. More on that in a minute.
If HMRC contact you, you will need to confirm two things, that you:
- intend to keep trading in 2021 to 2022
- reasonably believe there will be a significant reduction in your trading profits due to the impact of COVID-19 between 1 May 2021 and 30 September 2021
Who is Eligible this time around?
You must be a self-employed individual or a member of a partnership.
You must also have traded in both these tax years and submitted your 2019 – 2020 tax return on or before 2nd March 2021.
- 2019 to 2020
- 2020 to 2021
And as before – your trading profits must not exceed £50,000 and your trading profits need to be at least equal or more than any other non trading income. For example if you have a part time job or draw down your pension in the same period that will count as non trading income. If this affects your 2019 – 2020 figures HMRC say they will look at another year. Keep an eye on this and contact them if you need to.
You cannot claim the grant if you trade through a limited company or a trust.
How the grant is treated
The grant is subject to Income Tax and self-employed National Insurance Contributions. It will be reported on your 2021 to 2022 Self Assessment tax return.
And of course, please get in touch if you have any questions David@theaccountancypractice.com