Self-Employed Income Support Scheme
HMRC have recently announced a COVID update for the Fifth SEISS Grant and to what could see the end of financial support for the self-employed. This article includes the things to watch out for in the latest COVID Update.
- The Fifth SEISS Grant
- Making a Claim
- Who is Eligible?
- How is the Grant Calculated
- Previous SEISS Grants
- HMRC Online Tool Kit
The Fifth SEISS Grant
HMRC has confirmed that a fifth self employment income support scheme (SEISS) will be available from the end of July. This will cover the period May to September 2021 for those affected by the pandemic.
The grant is taxable and will be paid out in a single instalment. Guidance for claiming the grant will be available by the end of June 2021.
To be eligible for the grant you must be a self-employed individual or a member of a partnership.
Applicants must have traded in tax year 2019-20 and submitted your tax return on or before 2nd March 2021, or in tax year 2020-21.
You must either be currently trading but are impacted by reduced demand due to coronavirus, or have been trading but are temporarily unable to do so due to coronavirus.
To work out your eligibility for the fifth grant, HMRC will first look at your 2019 to 2020 self assessment tax return. Trading profits must be no more than £50,000 and at least equal to non-trading income.
The amount of the fifth grant will be determined by how much turnover has been reduced in the year April 2020 to April 2021.
Making a Claim
The online claims service for the fifth grant will be available from late July 2021.
- If your self-employed business turnover has fallen by 30% or more, as with previous grants you will receive 80% of 3 months’ average trading profits, capped at £7,500.
- If your turnover has not been as severely affected and the reduction is less than 30%, you will only receive 30% of 3 months’ average trading profits, capped at £2,850.
HMRC will contact you automatically, if you are eligible, in mid-July 2021 to give you a date that you can make your claim from.
Claims must be made directly by self employed individuals and cannot be processed by agents or accountants.
Who is Eligible?
To be eligible for the fifth grant, and for new entrants to the scheme, you must have filed a Self-Assessment tax return for the 2019/20 tax year by midnight on 2nd March 2021.
All other eligibility criteria will remain the same as the previous grants.
Firstly, you must be a self-employed individual or a member of a partnership.
You must also have traded in both the 2019/20 and 2020/21 tax years and submitted your 2019/20 tax return by 2nd March 2021.
You must either:
- be currently trading but are 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 continue to trade; and
- you reasonably believe there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus
How is the Grant Calculated
HMRC will first look at your Self-Assessment tax return for the 2019/20 tax year.
Your trading profits must be no more than £50,000 and at least equal to your non-trading income.
If you are not eligible based on your 2019/20 Self-Assessment tax return, HMRC will then look at the tax years 2016/17, 2017/18, 2018/19 and 2019/20.
Applications for the fourth grant are now closed, however the fifth grant will be available from mid- July 2021.
Previous SEISS Grants
The first grant – A grant of up to 80% of your average monthly trading profits capped at £7,500. This closed on 13th July 2020.
The second grant – A grant covering up to 70% of your average monthly trading profits, capped at £6,750. This closed on 19th October 2020.
The third grant – A grant covering 80% of your average monthly trading profits capped at £7,500. This closed on 29th January 2021.
The fourth grant – A grant covering 80% of your average monthly trading profits capped at £7,500. This closed on 1st June 2021.
HMRC Online Toolkits
HMRC have provided an online tool to check if you’re eligible.
If you received the previous grants you are likely to be eligible for the fifth grant if your business continues to be affected.
The government has an online portal for making a claim.
You must make a claim yourself – Tax Agents or Advisors cannot make a claim on your behalf.
How Onyx Accountants can help you?
We are unable to make the claim for you. However we can review your previously submitted tax returns and advise on how much you should be entitled to. We can advise on fund management and how to make the best use of your grant once received.
By planning ahead we can monitor your business performance as it emerges from the numerous lockdowns, and restricted business activity. Helping your business get back on track.
We would recommend completing your next tax return early, so you know how much tax you need to pay and by when. It also makes perfect sense if you are due a refund. We want to make sure that any refunds due are received as soon as possible. We can also advise on how best to make provision for any additional tax payments due by 31st January 2022.
By using Onyx Accountants and Business Advisors to undertake a review of the SEISS grants along with your self-assessment tax return, you eliminate the worry which allows you to concentrate on running your business.
GET IN TOUCH WITH ONYX
If you have any queries, or want to discuss further, please give us a call; or e-mail us at enquiries@onyx.accountants for a FREE no obligation consultation.
Got any questions or queries? Our friendly team of tax specialists are happy to help. Just drop us a line! Call us on 0121 753 5522 or 01902 759 800.
