SEISS 5 is now open to claims until 30 September.
Claimants must have a continuing self employment (or intending to continue as soon as possible), must have traded during the years to 5 April 2020 and 2021, and must have submitted their 5 April 2020 tax return by 2 March this year, showing self-employed profits which were £50,000 or less and which represented at least half of their total income. If the 5 April 2020 return does not meet these criteria, HMRC will look at an average of the four returns back to the year ended 5 April 2017.
If you qualified for SEISS 4 but chose not to claim, that does not prevent a claim for SEISS 5.
HMRC have contacted some (but not all) taxpayers who meet the tests listed above.
SEISS 5 relates to 1 May 2021 to 30 September 2021. To be eligible for any payment under SEISS 5, you must believe at the time you claim that your self-employed profits 1 May 2021 to 30 September 2021 (including any partnership profits) will be ‘significantly reduced‘ because of the pandemic. You must also keep evidence to support this. This might be for example details of booked or pencilled engagements that were cancelled because of Covid restrictions, venues where you routinely work that were closed for some of this time, or details of work missed because you had to self isolate. Where any client is very unsure whether profits are likely to be reduced between those dates, I suggest waiting until mid September to decide whether they are eligible. The claim declaration asks whether the claimant reasonably believes that profits from May to September will be significantly reduced. If someone claims at a time they reasonably believe this, they are not obliged to repay any grant if that does not turn out to be the case. But they must be able to demonstrate that their belief was reasonable when they were claiming.
In order to claim, two sets of turnover figures (self-employed income, ignoring any SEISS or local grant and without deducting any expenses) are needed. The total turnover for the year to 31 March or 5 April 2021 needs to be compared to the total for either the previous year, or if that year was lower than typical, the one before that. The turnover is the amount at the top of your self-employed accounts page, and is shown on page SE1 of the tax return in box 15. The difference (how much the most recent year’s turnover is lower than the earlier year) affects the level of SEISS payment available. If the turnover to April 2021 is down by 30% or more compared to the earlier year, you qualify for a higher SEISS amount. If it is down by less than 30%, you qualify for a lower SEISS amount.
The latest year’s turnover needs to be given in the SEISS 5 claim. HMRC will check turnover figures in some cases.
Other income such as pension income, employment income taxed under PAYE,rent received from a tenant or savings income like bank interest, are all ignored both when considering May-September 2021 profits and also when finding total turnover.
The grant payable is based on three months’ average profits from the last four tax years (or fewer years for new traders). This three-month amount is multiplied by 80% for a ‘higher’ SEISS claim, capped at £7,500. Or the three-month amount is multiplied by 30% for a ‘lower’ SEISS claim, capped at £2,850.
As with the other SEISS grants, any amount received will be subject to income tax and national insurance and will need to be included in the relevant tax return.
There is an option to pay some SEISS grant back, for taxpayers who find hat they have claimed in error, or who simply wish to pay something back for any reason.