Tax Writer Taxwriter Ltd
Columnist
In association with
Share this content
Self-employed

Budget 2021: Two further SEISS grants available

by

Self-employed traders will be able claim a fourth SEISS grant from late April and a fifth SEISS grant in late July 2021, but extra conditions will be attached to the fifth grant.

3rd Mar 2021
Tax Writer Taxwriter Ltd
Columnist
In association with
Share this content

The long awaited fourth grant (SEISS-4) has now been revealed to be set at 80% of the trader’s average trading profits, capped at £2,500 per month. It will be paid in one lump sum for three months, giving self-employed traders a maximum financial boost of £7,500.

The portal to apply for this grant will be open from late April to 31 May 2021.

However, all SEISS grants must be claimed by the taxpayer themselves, tax agents can’t claim it on behalf of clients. This is because the taxpayer must use their own government gateway ID to access the claims portal. 

New basis

The big difference for the SEISS-4 grant is that the figure of average trading profits will include profits reported for the tax year 2019/20. The average profit calculation will include profits from all four tax years from 2016/17 to 2019/20. HMRC performs this calculation from the tax return records it holds, and the taxpayer does not have to submit any figures to claim the grant. 

Register for free to continue reading

It’s 100% free and provides unlimited access to the latest accounting news, advice and insight every day. As well as access to this exclusive article, you can:

View all AccountingWEB content
Comment on articles
Watch our digital shows and more

Access content now

Already have an account?

Replies (9)

Please login or register to join the discussion.

avatar
By fawltybasil2575
04th Mar 2021 10:16

@ Rebecca,

I must respectfully disagree your comment that:-

"The fifth SEISS grant will be payable for the three months to 31 July 2021".

I have received (yesterday) an HMRC email which includes:-

"The UK Government has also announced that there will be a fifth and final SEISS grant covering May to SEPTEMBER (my emphasis)", and

"Your clients will be able to CLAIM (my emphasis) the fifth grant from late JULY (my emphasis) if they are eligible".

I am assuming of course that the HMRC email is not incorrect.

Basil.

Thanks (0)
avatar
By KateR
04th Mar 2021 11:10

@fawltybasil2575, @Rebecca. I think you are both right and dear Rishi is pulling a fast one. He intends the 5th SEISS grant to cover May to September but is only paying out 3 months worth or avge earnings not 5. Made the whole thing so confusing, with different rates depending on how much earnings have dropped by and delaying application dates, that he probably hoped no one would notice.

Thanks (0)
avatar
By RetiredTax
04th Mar 2021 12:02

Dear Rebecca,
Thank you for that info.
Could you please indicate however (if known at this point it time) which period(s) will be considered in the "Reduction in Turnover" calculations.

Thanks (0)
Replying to RetiredTax:
avatar
By Paul Crowley
04th Mar 2021 12:44

I think HMRC have not yet got a clue
What happens to council grants, properly declared ye 20 but to cover ye 21 expenditure?
Is that turnover?
Who is going to calculate turnover?
HMRC cannot, they will have ye20 but not 21(tax returns)
But then, some returns will be showing accounts dates ye April 2019, some ye March 20 (tax returns)
Does HMRC think the trader can figure this all on their own without massive unintentional error
A subcontractor looking at bank statements to decide his turnover?

The detail will be impossible to comply with

Thanks (0)
Replying to RetiredTax:
Morph
By kevinringer
15th Mar 2021 14:25

Q1. How will this work for partnerships? SEISS is claimable by individual partners based on their taxable profit. But turnover is the partnership as a whole.

Q2. To date SEISS has been calculated by HMRC using data it already holds from historic tax returns. What data will HMRC use for turnover? It can't use VAT returns because many <£85k turnover claimants aren't VAT registered. Will HMRC ask claimants to manually declare their turnover? If so, how will HMRC check it because the annual Tax Return will be the annual turnover and won't give an indication if the turnover for part of the year has changed, only the year as a whole.

Thanks (0)
avatar
By TaxableBen
04th Mar 2021 16:54

Proposed revisions
Legislation will be introduced in Finance Bill 2021 to tax a payment from SEISS as income for the tax year in which it is received.

Thanks (0)
avatar
By yousef123
06th Mar 2021 23:45

Thanks for the article.

I would appreciate some clarification.

Within your article it states that the Grant 4 is calculated as '' The average profit calculation will include profits from all four tax years from 2016/17 to 2019/20.''

I was referring to the Gov.uk website, and although not so clear, it seems that they will use ONLY the 2019/2020 returns for qualifying self employed (that includes those who were eligible for previous grants).. Can you confirm?

Thanks (0)
avatar
By fawltybasil2575
08th Mar 2021 18:12

Re SEISS 5

(1) The GOV.UK guidance states that the "reduction" at issue is NOT for the claim PERIOD (1 May 2021 to 30 September 2021) but for the year to 5 April 2021: in that respect the calculation basis is of course entirely different from SEISS 1, 2, 3 and 4 (for those four claims, the basis period is the same as the claim period).

(2) Whilst further information will follow in due course, one must assume that the "reduction" is simply the excess of:-

(i) the (of necessity estimated) turnover which would have realistically been
achieved if Covid-19 had not struck, over

(ii) the actual turnover.

Basil.

Thanks (0)
Helen Froggett Thomson
By Helen Froggett-Thomson
17th Mar 2021 14:58

Hi Rebecca,
Wondered if you have any idea what the new trader is expected/could ask to do this? 'We will provide you the opportunity to confirm that the caller is from HMRC'? obviously people commenting have alluded to the fraudster opportunity here - but what would info/facts would you suggest we prime our clients to have 'on their person' for this 'golden ticket' opportunity?? UTR number? or perhaps their declared profit or turnover?? what would NOT be available to a scammer? would welcome your feedback please.

Thanks (0)