Martin Lewis provides warning on fourth SEISS grant deadline
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The Self-Employment Income Support Scheme (SEISS) will offer a fifth grant to claimants in late July, with further information about the grant released earlier this month by HMRC. The fifth grant is expected to be the final grant under the scheme, which was started last year in response to the coronavirus pandemic.
What is the new three-stage process?
HMRC has set three-stage criteria which people need to meet if they want to claim the fifth SEISS grant.
Stage one explains the requirements for the claimant’s trading status and the tax years they must have traded in to be eligible.
Stage two outlines the criteria for tax returns and trading profits and specifies the claimant must have trading profits of £50,000 or less to claim.
The claimant’s trading profits must also be “at least equal” to their “non-trading income”, which is any money that is made away from their business.
Stage three involves deciding if a claim should be made and as part of this, the claimant must declare they “intend to keep trading in 2021 to 2022”.
Claimants are also required to declare they “reasonably believe there will be a significant reduction” in trading profits due to coronavirus between May 1, 2021, and September 30, 2021.
Further details about eligibility for SEISS grant five can be found via the Government website HERE.
How much will the fifth SEISS grant be worth?
Unlike the previous four grants, SEISS grant five will be worth different percentages of average trading profits depending on the claimant’s circumstances.
The fifth SEISS grant will be worth 80 percent of three months’ average trading profits, capped at £7,500, if the claimant has seen a reduction in turnover of 30 percent or above.
Someone who has seen a reduction in turnover of less than 30 percent could get a grant worth 30 percent of three months’ average trading profits, capped at £2,850 in total.
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Long-awaited guidance about how to calculate turnover for SEISS grant five was released by HMRC in early July.
Claimants are asked to work out their April 2020 to April 2021 turnover before they apply for the fifth grant.
Claimants are also asked to find a previous year’s turnover which they can use as a reference year.
If 2019/2020 was not a normal year for business, a claimant can use the turnover reported in their 2018/2019 tax return.
When can you apply for SEISS grant five?
At the moment, an opening date for SEISS grant five applications has not been confirmed.
However, HMRC has confirmed the online claim service will open at some point in late July and claims must be made on or before September 30, 2021.
People eligible for SEISS based on their tax returns should be contacted by HMRC in mid-July and given a personal claim date to apply from.
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