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SEISS 5 grant applications have opened

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Self-employed taxpayers can now apply for the fifth SEISS grant, but they may need to provide two different turnover figures from their business as part of their application.

30th Jul 2021
Tax Writer Taxwriter Ltd
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The portal to apply for the fifth self-employed income support scheme (SEISS) grant opened on 29 July, but not everyone can apply at once.

HMRC has contacted every self-employed taxpayer (by email or letter) who it believes may be eligible to apply for the fifth and last SEISS grant, giving them a personal start date from which they can apply. Taxpayers should not attempt to apply before their personal start date as their claim will not be processed.

This staggered start is to prevent every eligible taxpayer applying on the same day and crashing the system, and to give HMRC time to process all the grant payments due.

Taxpayers don’t have to apply for the SEISS grant on the first possible day, as the portal will remain open until 30 September 2021, but the sooner they apply, the quicker the money will arrive.

Who is eligible?

HMRC has checked basic eligibility of taxpayers in advance of opening the claims portal for them, such as whether the 2019/20 tax return was submitted by 2 March 2021.

The taxpayer must make a declaration in the application that they intend to keep trading in 2021/22. Also, that their trade profits will suffer a ‘significant reduction’ due to the impact of covid-19 in the period between 1 May 2021 and 30 September 2021.

There is no definition of “significant reduction” and HMRC is not planning to provide one.   However, the taxpayer is only required to look forward to estimate their profits in the period ending 30 September 2021. They are not required to re-examine their claim with hindsight after the event.

As long as they keep all evidence of why they believed profits have reduced (ignoring any covid-related grants received), they will be able to show that their reasonable belief at the time of application was that profits would be reduced.

If the taxpayer was eligible for the SEISS-4 grant (or earlier grants), but failed to apply on time they can still apply for the SEISS-5 grant, if they meet the other conditions. 

Turnover test

To complete the grant application the most taxpayers need to submit two different turnover figures, as outlined on 7 July. Since publishing that article, HMRC has improved its guidance and tweaked the law set out in the HMRC Direction slightly in respect of partnerships.

New traders, who started trading in 2019/20 and didn’t have a (different) self-employed trade in any of the years 2016/17 to 2018/19, don’t need to provide a turnover figure at all, as HMRC already has a figure for 2019/20 from their tax return. These new traders will get the 80% level of the grant.

Most taxpayers will need some help from their accountant to find the required turnover figures. HMRC has created a YouTube video for tax agents to show what clients will see during the SEISS-5 grant application process, and what other information the taxpayer will need to apply.

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Replies (12)

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By sijolees
31st Jul 2021 14:00

You state that "Where turnover has not fallen at all no SEISS grant is payable".

The HMRC guidance was previously: "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 1 May and 30 September 2021, you will suffer a significant reduction in trading profits."

This appears to have been removed from guidance but I wonder which interpretation is right?

Thanks (0)
Replying to sijolees:
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By Latinaid
03rd Aug 2021 09:52

sijolees wrote:

You state that "Where turnover has not fallen at all no SEISS grant is payable".

The HMRC guidance was previously: "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 1 May and 30 September 2021, you will suffer a significant reduction in trading profits."

This appears to have been removed from guidance but I wonder which interpretation is right?

I was in touch with someone yesterday whose turnover has increased, but he was told during the online claim process that he would be getting 30%. So it looks as if the original guidance still stands.

I also had this confirmed by two HMRC agents, but of course, we know how many pinches of salt need to be taken with information from that source ...

Thanks (1)
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By sanjay100
01st Aug 2021 11:17

It’s just free for all and most will claim even though their business has not been impacted by the pandemic. I don’t think apart a few months last year my clients especially in construction has not been impacted

Thanks (1)
Replying to sanjay100:
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By jonharris999
02nd Aug 2021 07:39

It is a very different picture in: creative & cultural industries, leisure, hospitality and retail, to name but some.

Thanks (3)
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By GHarr497688
02nd Aug 2021 09:07

I really don't understand why Turnover has anything to do with the Grants given.
Turnover alone does not indicate is a business is affected adversely by the Pandemic. Surely HMRC should be informed how wrong this procedure is. The business might do better or worse based on rates holiday , loan deferment , rent holidays , staff redundancy , furlough , SEISS grants etc etc.

Thanks (2)
Replying to GHarr497688:
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By DMBAcc
02nd Aug 2021 10:52

Does anyone understand ANYTHING HMRC do? Just another convoluted exercise to keep them all employed.

Thanks (3)
Replying to DMBAcc:
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By raju m
02nd Aug 2021 12:00

HMRC have to keep coming up with with changes to the rules and schemes in order to confuse politicians and justify their bonuses, pay rises and promotions etc.

Thanks (1)
Replying to DMBAcc:
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By raju m
02nd Aug 2021 12:00

HMRC have to keep coming up with with changes to the rules and schemes in order to confuse politicians and justify their bonuses, pay rises and promotions etc.

Thanks (0)
Morph
By kevinringer
02nd Aug 2021 12:59

SEISS5 is for significant reductions in profit May 2021 to September 2021, yet HMRC want to compare April 2020-April2021 turnover with a reference period. A business may not have been affected to April 2021, but significantly affected May 2021 onwards (eg the sole trader caught long covid). But they'll get a low level of grant because of the turnover test. There's no sense to the turnover test.

The other problem is getting hold of the turnover figure. That's easy enough if the client has reliable records but because all claimants will be small unincorporated businesses they have incomplete (sometimes non-existent) records and we compile the turnover when putting the accounts together. It's going to take us to January 2022 to do this for everyone, but those figures are needed now for SEISS5.

And finally, most clients for whom we've already prepared a 2021 Tax Return are businesses with early year ends eg 30 September 2020. But those turnover figures are no good, it has to be April 2020-April 2021.

All in all, that's a huge amount of extra work just because some jobsworth decided 'let's have a turnover test even though it's got nothing to do with the SEISS5 period'. Doesn't HMRC know how much work this can involve for small businesses?

Thanks (3)
Replying to kevinringer:
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By petestar1969
05th Aug 2021 09:22

In response to your last point, of course they do!! They don't want people to claim it so have made it awkward.

Thanks (0)
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By petestar1969
02nd Aug 2021 13:05

Another car crash waiting to happen.

A number of my below-average intelligence clients have already called me for help due to their inability to understand the difference between turnover and profit......

I was planning to retire before MTD for IT comes in, I might bring it forward........

Thanks (5)
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By Open all hours
02nd Aug 2021 16:46

Turnover is vanity. And is there a more vain organisation than HMRC? Can’t see any other reason for a turnover test.

Thanks (0)