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HMRC aims to support self-employed individuals, including business partnerships, whose income has been dwindling due to Covid-19 through the Self-employment Income Support Scheme. The current, fifth and last SEISS grant is worth up to £7,500.
What you will find in this post

‘30 September is fast approaching; Don’t miss out on the fifth SEISS Grant!’

For most of us, Covid-19 has impacted our livelihoods to a level where it may seem impossible to climb out of. Along with it affecting us financially, it has also impacted our mental health and general well-being. To tackle some of these ill effects, the government has announced series of grants for self-employed individuals. So far, there have been five grant announcements, and the fifth one, which has been announced recently, covers the period between 01 May 2021 and 30 September 2021. The fifth grant is thought to be the last and final grant of its kind.

To claim the fifth grant, you must be trading as self-employed during the tax year 2019 to 2020 and have filed your tax return before midnight 02 March 2021. This, of course, is open to those individuals who have been trading in the previous years; and continue to be impacted by COVID 19 with trading profits of no more than £50,000.

For the fifth grant, you are also required to provide proof that your income has been reasonably affected for the tax year 2020 to 2021 and that there is a reasonable reduction in trading profits for the period 01 May 2021 and 30 September 2021.

There are two levels of grants available. HMRC will compute the reduction of your turnover impacted due to the COVID 19 by comparing your two turnover figures.

If your turnover is reduced by 30% or more, you will receive three months of average trading profits at 80%. The maximum grant allowed for this category is capped at £7,500.

If your turnover has been affected by less than 30%, then you will not need much help and, therefore, will receive three months of average trading profits at 30%, which will be capped at £2,850.

You can claim for your fifth SEISS grant here.

To avoid being caught up in any scam, if you qualify for a SEISS grant, HMRC will contact you and send you a link where you will be required to enter your bank details. If in doubt, please make sure to call HMRC’s helpline or their chat services here.

 

Is SEISS only available for specific industries?

SIESS grant was brought into consideration for all types of industries affected due to COVID 19, and therefore help is available for all self-employed individuals. However, if your business is solely based on holiday lettings or income through the property, then you will not be eligible for the SEISS grant.

 

Will a partnership be eligible for the SIESS grant?

The good news is that partnerships are eligible for a grant. However, there are differences when calculating grants for each partner.

First of all, only one application can be sent out to HMRC for the SEISS grant. Based on the overall profits of the partnership and the shares of each partner, the grant will be awarded accordingly based on the SEISS rules.

For example, if a partnership has got £100,000 of profits and one partner receives 25%, he will be eligible for the grant as he has earned below £50,000. The other partner who owns 75% of the partnership will therefore not be eligible.

If a partner operates through a ltd company, he will also be not eligible, as this grant is only available for self-employed individuals.

 

Am I eligible for SEISS if I am a nonresident in the UK?

Yes, you will be eligible for SEISS. However, there are two main categories for it:

1.  If there were trading activities in the tax years 2016 to 2017 & 2017 – 2018, the average trading profit of these tax years should not be any more than £50,000, and the total earnings of each tax year are equal to the sum of your worldwide income.

2.  If there was no trade from 2016 to 2017, then your trading profits for the tax year 2017 to 2018 will be taken into consideration. The profits can not be more than £50,000 and equal to your worldwide income.

 

Can I continue to work if I have claimed SEISS?

SEISS was brought in to help boost confidence in self-employed individuals and not as a hindrance to work. If you can get more work, please do take it on and continue to grow your business. If you have received your grant, you will not be required to repay it if your business starts to pick up and you are back in pre-covid conditions.

 

I have only registered as self-employed during 2019/2020. Am I eligible to claim SEISS?

If you had registered during the tax year 06 April 2019 to 05 April 2020, you would not have been eligible to apply for the first three grants. However, you will be for the fourth and fifth grant provided you submitted your tax return on 02 March 2021.

If you failed to submit your tax return for 2019/2020 by midnight 02 March 2021, unfortunately, you will not be eligible anymore.

 

Will I have to Payback the SEISS grant?

 The very nature of a grant is to help a business financially without any repayment schedule. Therefore, you will not be required to repay SEISS. However, these grants are prone to tax. You will have to pay income tax and Class 4 national insurance contributions.

You will pay tax during the year they were received. Therefore, any grant you received in a particular tax year, for instance, 2019/2020, will have to be added to your tax return.

The first three grants were received during the tax year 2020/2021. Therefore they should be included in your self-assessment tax return for the year 2020/2021.

The fourth and fifth grants are taxable for the tax year 2021/2022 and should be reported on your self-assessment tax return for the year 2021/2022.

 

Will the previous SEISS grants be taken into consideration for my fifth SEISS grant?

Even though you will have to include your previous grants for self-assessment tax return purposes, they will not be taken into consideration when applying for your fourth or fifth grant. Therefore, when applying for the SEISS, make sure you are only taking your actual trading profits and not the SEISS grant money when applying for the fourth or the fifth grant.

 

I am claiming universal credit; am I eligible for the SEISS grant?

If you have been unfortunate enough that your business has come to a complete standstill and are unable to trade due to COVID19, then you may have resorted to universal credit.

Even though you are claiming universal credit, you can still apply for the SEISS grant.

Please note that once you receive your SEISS grant, this will impact your future universal credit payments. However, the previous periods will stay unaffected.

 

Is there a specific period to claim SEISS grants?

Yes, there are specific periods for each SEISS grant. If you haven’t applied for your grant during that particular period, you will not be allowed to claim them at a later stage.

 

If you haven’t claimed any of the previous grants, you will still be able to claim for the fifth grant.

The period for the fifth grant is between May 2021 – Sep 2021 and the deadline for the fifth grant is at 30 September 2021. 

UK government has done immensely well in helping businesses recover from the pandemic. Unfortunately, most will have to shut doors. However, if you are self-employed and earning under £50,000, there is a high probability of surviving through the pandemic with the SEISS support. Further to the SEISS support, further help is available to specific industries, which you can find here.

 

If you require your tax returns to be submitted or further understand how to apply for the SEISS grant, please contact us; we will be more than happy to assist you.

 

Get in touch for a free consultation

About the Author

Bilal Khalid

CEO, Accountant

Bilal Khalid EvoTax accountant

Successfully running my own small business for years has taught me a great deal about the complexities of taxation and I understand all the pain points that every entrepreneur has to go through. I often found myself paralysed with fear of making a mistake and getting fined and eventually decided to take up accounting and finances myself. Today, I help other small businesses suffering through similar mistakes and I am happy to share my knowledge, jargon free!

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