Turnover calculation added to 5th self employed grant claim
The application process for the fifth Self-Employment Income Support Scheme (SEISS) grant will depend on details of two years of turnover and losses resulting from the pandemic
The scheme will begin soon, and HMRC will contact self-employed people directly to let them know if they are eligible to register. The scheme will be open from late July. There are several crucial regulatory changes for the fifth grant to be aware of, as well as the fact that accountants are not permitted to apply on behalf of their clients directly.
Do I have to provide turnover figure to HMRC to get the fifth SEISS grant?
HMRC has confirmed that ‘the fifth grant is different. In most cases, you’ll need to provide two turnover figures when you make your claim. We’ll use these to work out how much you’ll get’.
Claims must include information about turnover if you submitted a tax return for your business in 2019 to 2020 as well as any of the following tax years: 2018-19, 2017-18 and 2016-17. Turnover includes the takings, fees, sales or money earned or received by your business.
Where to find turnover figures?
Turnover figures can be obtained from the 2020-21 self assessment tax return, from accounting software, go through your bookkeeping or spreadsheet records that cover your self-employment invoices and payments received, check the bank account used for your business to account for money coming in from customers, or ask your accountant or tax adviser.
Do I have to include first three SEISS grants when calculated my turnover for fifth grant?
Claims must not include previous SEISS grants, Eat Out to Help Out payments and local authority or devolved administration grants.
How can I calculate my turnover for fifth SEISS grant if I have a partnership?
In the case of partnerships, work out and include your percentage share of the partnership’s turnover, for each individual partnership. This will be the same as the percentage of profit taken from each partnership in your reference year, even if your profit share percentage changed in 2020 to 2021. You should add this to the turnover from your other businesses.
In most cases, you must use the turnover reported in your 2019 to 2020 tax return as a reference year. The figure needs to be based on a 12-month period and include the total turnover for all your businesses.
You can utilise the turnover reported in your 2018-19 tax return if 2019-20 was not a normal year for your firm. Your records should reflect the fact that 2019-20 was not an ordinary year for you. For example, if you were on carers leave, long-term sick leave, or had a new child; if you served in the military as a reservist; if you lost a significant contract; or if you were qualified for the fifth grant but did not file a 2019-2020 return.
How much will I get for fifth SEISS if my turnover is down by 30% or more?
the grant will be:
worked out at 80% of three months’ average trading profits; and
capped at £7,500.
If your turnover is down by less than 30%, the grant will be:
- worked out at 30% of three months’ average trading profits; and
- capped at £2,850.
If your total turnover was £20,000 in 2019-20 but decreased to £10,000 in April 2020 to April 2021, a 50% loss in income, you will be eligible for the larger grant, which is worth 80% of three months’ average trading profits if your turnover is down by 30% or more.
If your turnover is decreased by 20% compared to 2019-20, you will receive a smaller grant amount of 30% of three months’ average trading earnings, as long as your turnover is less than 30%.
Can I use 2018-19 turnover when calculating my turnover for fifth SEISS grant?
If 2019-20 was not a normal year for your business, due to the pandemic, SEISS applicants can use 2018-19 as the turnover reference year.
If you are currently trading but have reduced demand, you must keep any evidence that your business has had reduced activity, capacity or demand due to Covid-19 at the time you made your claim, such as:
- business accounts showing reduction in activity compared to previous years;
- records of reduced or cancelled contracts or appointments; and
- a record of dates where you had reduced demand or capacity due to government restrictions.
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