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Business Services  •  Business Tax  •  Coronavirus Advice

SEISS 5 challenges taxpayers with new ‘turnover test’ to receive grants

By RJP LLP on 22 June 2021

The fifth and final self-employed income support scheme (SEISS) grant has now been unveiled by the government and from July it will be possible to submit applications. Eligibility for the grant will be similar to SEISS 4, but with one important distinction. The amount you can receive will be determined by how much your turnover was reduced in the year from April 2020 to April 2021.

HMRC is currently in consultation with professional bodies to agree exactly how SEISS 5 will be calculated, and this article shares what we know so far.

Eligibility criteria for accessing SEISS 5

  • SEISS 5 covers the period from May to September 2021.
  • To be eligible you must have been self-employed or in a trading partnership in 2019/20, have submitted a tax return on or before 2 March 2021, and have been trading (subject to Covid restrictions) in 2020/21.
  • How much you can receive will depend on how badly your finances were affected by the pandemic between the period April 2020 and April 2021.
  • The reasons why your turnover was affected can be a result of reduced business activity, capacity, demand, or a general inability to trade.
  • Applications will require a ‘turnover test’ to have been completed although we do not yet know how this will be calculated.
  • Eligibility for SEISS 5 will primarily be based on the data within your 2019/20 self-assessment tax return, and if you are not eligible based on this information, the tax years: 2016/17, 2017/18, 2018/19 will be reviewed.
  • Trading profits must not exceed £50,000 per year.

The final round of grants is clearly designed to ensure that the people who have been claiming and potentially receiving more in grants than their usual level of revenue can no longer benefit from taxpayer contributions.

How much can I expect from SEISS 5?

So far HMRC has revealed the grants will be payable as follows according to the level of turnover reduction:

  • Turnover reduced by 30% or more: A grant for up to 80% of 3 months' average trading profits is payable up to a maximum value of £7,500;
  • Turnover reduced by less than 30%: A grant of up to 30% of 3 months' average trading profits is payable up to a maximum value of £2,850.

As with earlier grants, if you are eligible, HMRC will be contacting you directly in mid-July with details of when you can submit a claim. Unlike earlier claims, this time you will need to include turnover calculations in your application. You may also require evidence to explain why you believe your turnover has been significantly affected if HMRC challenges your application.

Scams and phishing emails

Be aware that there are a number of phishing scams operating with fraudsters sending fake emails from ‘HMRC’ confirming that the person is eligible for SEISS 5. In some of these emails claimants are encouraged to “Sign in to HMRC online services” which is a fake website and submit personal information like bank details, passport number and diving licence details. Stay alert to possible scams and always check with your accountant of HMRC if you think an email may be fake.

If you receive the genuine SEISS 5 eligibility notification from HMRC and need help with the turnover calculations to support your claim, we can help. Get in touch via partners@rjp.co.uk.

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