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Unlike the previous four SEISS grants, the fifth will differ in terms of how the payouts are calculated.

The fifth SEISS grant will cover the months of May to September 2021. The size of the grant will be determined by how much of your turnover has been reduced in the year from April 2020 to April 2021.

To be eligible for the fifth SEISS grant, you must be a self-employed individual or a member of a partnership.

When must you have been actively trading?

Eligible applicants for the fifth SEISS grant must have been actively trading during the 2019/20 and 2020/21 tax years, and submitted their self-assessment tax returns for 2019/20 on or before 2nd March 2021. You must also be actively trading in the current 2021/22 tax year, and intend to continue doing so.

How HMRC will calculate your eligibility

HMRC will look first at your 2019/20 self-assessment tax return. Trading profits must be a maximum of £50,000 and at least equal to your non-trading income.

If you are not eligible based your 2019/20 tax return, HMRC will instead look back at previous tax years, starting from 2016/17, all the way through to 2019/20.

What to declare when you claim

Applicants must state their intentions to continue to trade in the 2021/22 tax year, and also declare that they ‘reasonably believe’ there will be a significant reduction in their trading profits due to the impact of COVID-19 between 1st May 2021 and 30th September 2021.

This could include loss of business activity, demand, capacity, or a total inability to trade.

Applicants must also retain evidence of their business’ fall in trading profits. HMRC has requested applicants make an “honest assessment” of the impact of Covid-19 on their businesses between May 2021 and September 2021.

HMRC provides examples and definitions of reasonable belief and significant reduction in your trading profits here.

How the fifth SEISS grant is calculated

If your eligible business suffered a reduction in turnover of 30% or more between April 2020 and April 2021, you will be entitled to 80% of three months’ average trading profits, up to a maximum of £7,500.

If your eligible business experienced a reduction in turnover of less than 30% between April 2020 and April 2021, you will be entitled to 30% of three months’ average trading profits, up to a maximum of £2,850.

In order to calculate the reduction in turnover, you will need to first work out your turnover figure for a 12-month period starting on any day between 1st April 2020 and 6th April 2020. The turnover for this 12-month period should then be compared to the turnover figure you reported on your 2019/20 tax return.  This will allow you to calculate the percentage of the change in turnover. 

If 2019/20 was not a ‘normal’ year for your business, then the 2018/19 reported turnover figure can be used as a comparative instead.

You will not be required to provide HMRC with your turnover figure if you started trading in the 2019/20 tax year, and did not trade in the 2018/19, 2017/18 and 2016/17 tax years.

Care must be taken when determining the reduction in your turnover, as the calculations can differ slightly in certain circumstances. You should seek professional advice if you are unsure.

Full guidance on working out your turnover is provided by HMRC here.

HMRC will liaise with you directly if it believes you could be eligible for the fifth SEISS grant – based on your tax returns – in mid-July, with the online claims platform set to open from the end of July. The deadline for making claims is 30th September 2021.

Date published 7 Jun 2021 | Last updated 7 Jul 2021

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