Self-Employment Income Support Scheme (SEISS) fifth grant
Thank you for joining this webinar about the Self-Employment Income Support Scheme, the fifth grant. I'll refer to it as SEISS throughout the rest of the webinar. Guidance for the fifth grant has now been published on GOV.UK and this webinar reflects the latest information available. We also recommend that you regularly visit GOV.UK where you can find more information about SEISS and other support available. You can also register to get email alerts when changes are made. During the webinar we'll be looking at an overview of the scheme, who can claim, how much you may be entitled to, how to claim the fifth grant, what happens after you've claimed and information about some other support that's available.
We'll also look at a few examples to give you a better understanding of how the scheme works. Let's start with the overview of the scheme. The SEISS scheme supports self-employed individuals including members of business partnerships whose income has been affected by COVID-19 (Coronavirus). The fifth SEISS grant covers the period the 1 May 2021 to the 30 September 2021.
It provides support to eligible self-employed individuals who are currently trading but are impacted in this period by reduced demand due to coronavirus or have been trading but are temporarily unable to do so due to coronavirus. To work out your eligibility for the fifth grant we'll first look at your 2019 to 2020 Self Assessment tax return your trading profits must be no more than £50.000 and at least equal to your non-trading income. If you're not eligible based on your 2019 to 2020 tax return, we'll then look at the tax years from 2016 to 2017 to 2019 to 2020 inclusive.
If you're eligible and want to claim, then you must make your claim for the fifth grant by 23:59 on the 30 September 2021. If you think you're eligible but we haven't contacted you with a personal claim date, you can check by signing into the online claim service on GOV.UK. The amount of the fifth grant will be determined by how much your turnover has gone down in a 12 month period from April 2020 to April 2021 compared to a year from before the pandemic. If your turnover increased you may still qualify for the 30% grant. You'll still need to reasonably believe that due to reduced demand or inability to trade between the 1 of May and 30 September 2021 you will suffer a significant reduction in trading profits.
The fifth grant will be paid out in a single instalment and provide a taxable grant worth 80% of 3 months average trading profits capped at £7.500 if your turnover is down by 30% or more or 30% of 3 months average trading profits capped at £2.850 if your turnover is down by less than 30%. We'll explain more on how to work out your turnover later. To make a claim for the fifth grant you must have reasonable belief that you will suffer a significant reduction in trading profits due to the reduced business activity, capacity, demand or inability to trade due to coronavirus between 1 May 2021 and 30 September 2021 and intend to continue to trade as well.
HMRC expects you to make an honest assessment about whether your business has been impacted by coronavirus. You can make a claim even if you didn't make a claim for a previous grant. It will however, be subject to Income Tax and self-employed National Insurance. If you receive the fifth grant you must report this on your self assessment tax return for 2021 to 2022. This is due to be sent to HMRC by 31 January 2023. SEISS grants and other coronavirus payments have their own boxes on the 2020 to 2021 tax return.
These grants are not counted as access to public funds you can claim the grant on all categories of work visa. Let's have a closer look at the fifth grant starting with who can claim. The eligibility criteria are the same as the fourth grant. You must have been trading in both the tax years 2019 to 2020 and submitted your Self Assessment tax return by 2 March 2021 and the tax year 2020 to 2021 or would have been if not affected by coronavirus. If you weren't eligible for the fourth grant based on the tax returns you've submitted by 2 March 2021 you won't be eligible for the fifth grant either.
If the information in your Self Assessment returns shows you may be eligible then you can claim the fifth grant if you're a self-employed individual or a member of a business partnership. If your business has been impacted by coronavirus between the 1 May 2021 and the 30 September and if you meet the eligibility conditions. We'll let you know more about the specific impact your business must have experienced to be eligible later in the webinar. You can't claim the grant if you trade through a limited company or a trust. If you claim Maternity Allowance this will not affect your eligibility for the grant. As with the previous 4 grants HMRC will assess if you're eligible for the fifth grant based on your trading profits and non-trading income on your Self Assessment tax returns. Firstly, we'll look at your Self Assessment tax return for 2019 to 2020. Your trading
profits must be no more than £50.000 and at least equal to your non-trading income. If you're not eligible based on the 2019-2020 tax return we'll look at up to 4 tax years depending on which of the following years you're traded in 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020. If you have a gap in the years you have traded, you'll only use your most recent tax returns after the gap to work out your eligibility. As mentioned before you must have been trading in both the 2019 to 2020 and the 2020 to 2021 tax years or would have been if not affected by coronavirus. You must also have trading profits not a trading loss based on either your 2019 to 2020 tax return or an average over the 4 tax years 2016 to 2017, to 2019 to 2020.
As with the fourth grant you must also either be currently trading but be impacted by reduced capacity, demand or activity due to coronavirus or have been trading previously but be temporarily unable to do so due to coronavirus. And you must declare that you both intend to continue to trade and reasonably believe that you will suffer a significant reduction in your trading profits due to reduced activity, capacity or demand or inability to trade due to coronavirus. We'll now see some more about reasonable belief. In order to claim you must have reasonable belief that you'll suffer a significant reduction in trading profits because between the 1 May 2021 and 30 September 2021 you've had either reduced business activity, capacity or demand due to coronavirus or been unable to trade due to coronavirus. You must reasonably believe that you'll suffer a significant reduction in trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus between the 1 May 2021 and 30 September 2021. You must keep evidence that shows how your business has been impacted by coronavirus resulting in less business activity than otherwise expected.
HMRC expects you to make an honest assessment about whether you reasonably believe your business will have significant reduction in profits. You shouldn't take into account previous SEISS grants or other coronavirus scheme support payments you've already received when deciding whether you reasonably believe that you will suffer a significant reduction in trading profits for SEISS purposes. We expect you to do the right thing and make an honest assessment that your business has been sufficiently affected to claim and to keep appropriate records as evidence. Businesses impacted by reduced demand. For the fifth grant this applies to your business if it has been impacted by reduced demand, activity, or capacity due to coronavirus between 1 May and 30 September 2021. For example, you have fewer customers or clients than you'd normally expect resulting in reduced activity due to social distancing or government restrictions. You have one or more contracts that have been cancelled and not replaced or you carried out less work due to supply chain disruptions.
You must not claim if the only impact on your business is increased costs, for example if you've had to purchase face masks and cleaning supplies. This would not be considered reduced demand. Businesses previously trading but temporarily unable to do so. This applies to you if you've been temporarily unable to carry out your business activities due to coronavirus because for example your business has had to close due to government restrictions, you've been shielding or self-isolating in line with NHS guidelines and are unable to work from home, if you've been abroad and have to self-isolate this doesn't count, or you've tested positive for coronavirus and are unable to work, you can't work due to caring responsibilities for example as a result of a school or child care facility closures. If you had to close before the 1 May 2021 and continue to be closed for a period of time between the 1 May 2021 and 30 September 2021 you can still claim if you're eligible. How different circumstances affect eligibility. There are some circumstances that can affect
your eligibility such as if your return is late, amended or under inquiry, if you're a member of a partnership, if having a new child affected the trading profits you reported for the tax year 2019 to 2020 or means you didn't submit a tax return for that year, if you have loans covered by the loan charge and haven't agreed a settlement with HMRC before 20 December 2019. If you claim averaging relief, if you're a military reservist, if you're non-resident or chose the remittance basis. See fuel guidance on GOV.UK for more information on how your circumstances affect your eligibility. Let's now find out how much you may be entitled to.
If you meet the eligibility criteria, the amount of the fifth grant will be determined by how much your turnover has gone down after you've compared your two turnover figures. As the grant is now based on how much your turnover is down in the pandemic year if you previously claimed a SEISS grant the fifth grant will be a different amount to what you previously received. If your turnover is down by 30% or more, the grant is based on 80% of 3 months average trading profits capped at a maximum of £7.500 in total. If your turnover is down by less than 30%, the grant is based on 30% of 3 months average trading profits capped at £2.850. The grant is paid in a single instalment and is subject to Income Tax and self-employed National Insurance.
You don't need turnover figures if you started trading in 2019 to 2020 and didn't trade in the tax years 2018 to 2019, 2017 to 2018 or 2016 to 2017. If you don't need to tell us about your turnover you'll get 80% of 3 months average trading profits. How to work out your turnover. Turnover includes the takings fees, sales or money earned or received by your business. The turnover figure should not include any coronavirus support payments or anything reported as any other income on your tax return including Universal Credit.
You'll need to tell us about your turnover if you traded in a 2019 to 2020 tax year as well as in any of the following years 2018 to 2019, 2017 to 2018 or 2016 to 2017. Before you claim you must first work out your turnover for the 12-month period. Your period must start on any day from 1 April 2020 to 6 April 2020 and secondly find a previous year's turnover to use as a reference year. You'll need to have both figures ready when you make your claim. To find your figures you can refer to your 2021 Self Assessment tax return if you've completed it or ask your accountant or tax advisor or check the accounting software you use for your business.
You can also go through your bookkeeping or spreadsheet records that cover your self-employment invoices and payments received or check the bank account you use for your business to account for money coming in from customers. You should check that your figure is accurate. HMRC will be able to check your figures after you submit your tax return for this period. Your figure must include the turnover from all of your businesses. The turnover figure should
not include any Universal Credit or coronavirus support payments, this includes previous SEISS grants, Eat Out to Help Out payments or local authority or devolved administration grants. More than one business and you're a sole trader. Your figure must include the total turnover from all of your businesses. This includes any new business started between April 2020 and April 2021.
For partnerships you need to work out the partnership's total turnover figure. If you have more than one business including a partnership. For each partnership you'll need to include your % share of the partnership's turnover. This will be the same as the % of profit you took from each partnership in your reference year even if your profit sharing % changed in 2020 to 2021. You should add this to the turnover from your other businesses. If the partnership
started between April 2020 to April 2021 you need to work out your share of the turnover. If you have Lloyd's income as well as income from another business you should use the turnover from your other business. If you only have Lloyd's income you'll need to contact us. How to find a previous year's turnover to use as a reference year. In most cases you should use the turnover reported in your 2019 to 2020 tax return as a reference year. Your figure needs to be based on a 12-month period and include the total turnover for all your businesses. Your 12-month period does not need to start in April.
If 2019 to 2020 was not a normal year for your business you can use the turnover reported on your 2018 to 2019 tax return. For example if you were on carer's leave, long-term sick leave or had a new child or carried out reservist duties, lost a large contract or were eligible for the fifth grant but did not submit a 2019 to 2020 tax return. There is a box for the turnover on your tax return. You can find tax returns by logging into your personal tax account, checking your business records or asking your accountant.
If you have an accounting period longer or shorter than 12 months you'll need to work out what your 12 month turnover was. If you have more than one business as a sole trader your figure must include the turnover from all of your businesses. If you have more than one business including a partnership. For each partnership you'll need to include your percentage share of the partnerships turnover. This will be the same as the % of profit you took from each partnership in this year. You must add this to the turnover from your other businesses. If you're a member of a partnership and have no other businesses.
You need to use the partnership's total turnover figure. Trading profits. This is shown on your tax calculation as either profits from self-employment or partnerships. We'll work out your total trading profit after deducting any allowable expenses, flat rate expenses, capital allowances and so on. If your annual gross trading income from one or more trades or businesses is more than £1.000 you may have used the tax free allowances instead of deducting any expenses or other allowances.
We'll work out your trading profit after deducting any tax-free allowances. We won't deduct from your trading profits any losses brought forward from previous years or your personal allowance. We'll add losses brought forward from previous years to the amount shown on your tax return as total taxable profits from this business. That is the amount after expenses have been deducted and not the trading profits that is before expenses have been deducted.
Profits from partnerships. Your share of the partnership's trading profits is worked out by taking all partnership income and deducting anything that is non-trading income such as investment income. Again any losses brought forward from previous years will be added to the amount shown as your share of the total taxable profits from the partnerships business. When the paper short return your trading profit after allowable expenses is shown on your tax return as profit. Here's an example of trading profit if you've claimed the trading allowance.
For 2016 to 2017 the trading income is £21.000. No trading allowance has been claimed meaning the trading profit is also £21.000 pounds. For the following 3 years the trading allowance of £1,000 pounds has been claimed. This means that the total profit for each of these tax years is reduced by £1.000.
If you have more than one trade in the same tax year we'll add together all profits and deduct any losses for all trades when working out your trading profit. So if the trading profit for trade 1 is £60.000 and you made a loss of £20.000 in trade 2, the total profit is £40.000 If you have traded for all 4 tax years to work out your average trading profit we add together all profits and deduct losses for all 4 tax years where you've had continuous trade, then divide by 4. So in this example 2016 to 2017 to 2018 to 2019, your trading profit was £60.000 for each of the three years equalling £180.000. In 2019 to 2020 you suffered a loss of £30.000
which means that the total trading profit for the 4 years is a total profit of £180.000 pounds minus £30.000 pounds giving us £150.000. To arrive at the average profit for the 4 years we divide £150.000 by 4 to give us £37.500. If you didn't trade in the tax year 2016 to 2017 to work out your average trading profit we add together all profits and deduct losses for the three tax years 2017 to 2018 to 2018 to 2020 then divide by 3. In this example the profits over the 3
years are added together and equals £105.000 and then divided by 3 to give us an average of £35.000. If you didn't trade in the tax year 2017 to 2018, we'll work out your average trading profit based on the tax years 2018 to 2019 and 2019 to 2020 only, even if you traded in the tax year 2016 to 2017. In this example we don't consider the profits made in 2016 to 2017. To work out the average we
divide £80,000 by 2 to give us an average of £40.000. Non-trading income. This is the amount recorded as total income received on your online or paper tax calculation less your trading income. The figure does not include losses.
HMRC will work out your non-trading income by adding together all of your income from earnings, property income, dividends, savings income, pension income, overseas income, miscellaneous income including taxable social security income. It's important to note that the grant is also recognised as income for the purposes of claiming benefits and credits including Tax Credits, Universal Credit and Council Tax Reduction. If you claim any of these it may affect the amount you're entitled to. You'll need to report the grant as self-employed income for any Universal Credit claims, self-employed income trading profits for any tax credit claims. We'll now take you through how to claim the fifth SEISS grant. You'll be able to claim for the fifth grant until 23:59 on 30 September 2021.
If you're eligible you should receive a letter, text or email from us with your personal claim date by the end of July. If we haven't contacted you about the fifth grant you'll be able to see if you're eligible or why you're not as part of the claim process when you access the SEISS claims service. You must make the claim yourself, you must not ask a tax agent or advisor to claim on your behalf as this will trigger a fraud alert which will delay your payment.
Claiming online is quick and easy using your Government Gateway account. You can do it on a smartphone. This will help keep our advisors free to help customers who need it most. Search for Self-Employment Income Support scheme on GOV.UK. Information needed to make a claim. To avoid delays please check that you can log into the Government
Gateway before your personal claim date. Please also check your contact details are correct in your Government Gateway account. If you don't have an account or have forgotten your details follow the instructions on GOV.UK by searching HMRC services sign in or register. To access the claim tool you'll need your Self Assessment Unique Taxpayer Reference number, that's your UTR, your National Insurance number, your Government Gateway user ID and password. These will be the same as those used for your previous SEISS claims if you've made any. If this is your first time claiming a SEISS grant you may be asked additional questions to prove your identity. These could relate to any of the following. Your UK passport, your driving licence, information held
on your credit file such as loans credit cards or mortgages, your Self Assessment tax return within the last three years, it could also relate to your tax credit claim, your P60 or one of your 3 most recent payslips. Please have this information ready when making your claim, your claim may be delayed if you cannot answer the identity verification questions. You'll also need your turnover figures for April 2020 to April 2021, 2019 to 2020 and/or 2018 to 2019.
You'll be asked to select whether you'd like your grant paid into a personal or business bank account. This must be a UK bank account. Only provide bank account details where a Bacs payment can be accepted. You'll need to provide details including, the name on the account, sort code, the bank account number and your address linked to your bank account.
Amendments to tax returns. For the fifth grant if you make an amendment to your tax return on or after 3 March 2021 you must tell us within 90 days if the amendment either lowers the amount you're eligible for or causes you to no longer be eligible. This is because any amendments made after 2 March 2021 wouldn't have been considered when looking at your eligibility or the amount of grants you're entitled to. You may therefore need to pay back some or all of the grant if an amendment lowers the amount you're eligible for or causes you to be no longer eligible. If you don't tell us we'll contact you after the deadline for making amendments to tell you what amounts you'll need to pay back. If you don't tell us within 90 days you may also have to pay a penalty. You don't need to tell us if either the amount you're eligible for is lowered
by £100 or less or you're no longer eligible and the grant you received was £100 or less. If you're not sure if your amount of grant has lowered, you should contact us for further help or speak to your authorised agent. The role of agents. If you use an accountant or tax agent they must not make the claim on your behalf. If your accountant or tax agent tries to claim on your behalf this will trigger a fraud alert that will delay your payment and you'll need to call HMRC to resolve the issue yourself. They can support you to get ready to make a claim yourself such as helping you with the turnover test and suggesting other forms of support you may be eligible for in addition to or instead of SEISS. When you're applying, please be aware of scams. It's really important that you protect yourself from fraud. We are aware of an increase in scam emails, calls and texts.
We're urging customers to be careful if they're contacted out of the blue by someone asking for money or personal information. There are a lot of scams around where fraudsters are calling, texting or emailing customers claiming to be from HMRC. If in doubt we advise you not to reply directly to anything suspicious but to contact HMRC straight away, search for HMRC scams on GOV.UK. We'll now look at what happens after you've claimed.
After you've claimed we'll undertake checks to confirm the details. If your claim is approved it will be paid directly into your bank account within 6 working days paid in a single instalment. The online system will let you know how much you will be paid and how HMRC calculate that amount based on your previous tax returns.
You must keep a copy of all records in line with normal self-employment record-keeping requirements including the amount claimed and the grant claim reference. Further evidence. If your business recovers after you've claimed this won't affect your eligibility for the grant. Eligibility is based on your reasonable belief at the time you made your claim that your trading profits would be significantly reduced. You must keep evidence to support your claim.
If you're currently trading but have reduced demand you must keep any evidence that your business has had reduced demand due to coronavirus at the time you made your claim. This includes business accounts showing reduction in activity compared to previous years, records of reduced or cancelled contracts or appointments, fewer invoices, a record of dates where you had reduced demand or capacity due to government restrictions. You must keep evidence if your business has been unable to trade due to coronavirus. This includes a record of dates where you had to close due to government restrictions, track and trace emails if you've been instructed to self-isolate in line with NHS guidelines and are unable to work from home. If you've been abroad and had to self-isolate this does not count. A letter or email from the NHS asking you to shield or test results if you've been diagnosed with coronavirus.
As previously mentioned, SEISS grants have their own boxes on the Self Assessment tax return. You must report to any SEISS grant received on your Self Assessment tax return as shown on this table. The SEISS grant, the first 3 SEISS grants 1, 2 and 3 must be shown in the tax return for the tax year 2020 to 2021 and the filing deadline for that return is 31 January 2022. Grants 4 and 5 must be included in the 2021 to 2022 tax return and the deadline for filing that return is midnight on the 31 January 2023.
We'll now have a look at what other support's available for you. You may be able to claim for Universal Credit. If you make a claim for Universal Credit this payment may be reduced or stopped if you claim the SEISS grant. Other tax credits and benefits may be affected too. You should check how tax credits and other benefits affect each other and find out what to do if you're already getting benefits.
The government is also providing the following help for the self-employed. Recovery Loan Scheme, Restart Grant, Additional Restrictions Grant and Test and Trace support payments. Help with paying your tax bill. Customers unable to pay their tax bill on time can
find more information about financial support on GOV.UK. We've come to the end of this webinar, thank you very much for watching.