A new turnover test applies when making fifth Self-Employment Income Support Scheme (SEISS) claims. This is a significant change compared to previous SEISS grant claim versions and means you must generally have two turnover figures ready when you make your claim.
Key points about the fifth Self-Employment Income Support Scheme grant
- The eligibility rules for the fifth SEISS grant are similar to those for the fourth grant
- You’ll need to confirm that you meet other eligibility criteria when you make your claim and HMRC will base eligibility on your submitted tax returns
- HMRC will contact you in mid-July to give you a date that you can make your claim from
- The online portal for eligible individuals to make a claim for the fifth grant will be available from late July 2021
- You must make your claim on or before 30th September 2021
- Your grant claim amount will depend on whether your turnover has dropped by more or less than 30%
These new turnover rules mean that before you can make a claim you must:
- Work out your turnover for a 12-month period starting from 1st April 2020 to 6th April 2020
- Work out your turnover from either 2019/20 or 2018/19 to use as a reference year
You won’t have to provide turnover figures in every case. For example, HMRC will not ask for any turnover figures if you started trading in 2019/ 20 and did not trade in the following tax years, 2018/19, 2017/18, 2016/17.
We have included below some of the main points to consider when working out your turnover figures.
To work out your reference year turnover figure, you can generally take this figure from your submitted 2019/20 tax return.
There is a box for turnover on your tax return and the figure can be taken from there. However, there are several additional points to consider. You generally need to use the 2019/20 tax year but in some circumstances, you may be able to use the 2018/19 tax return turnover figure instead. If 2019/20 was not a normal year for your business, you can use the turnover reported in your 2018/19 tax return. To be able to do this, you must be able to show how 2019/20 was not a normal year for you. HMRC has listed a few examples where you may be able to use the 2018/19 tax year:
- If you were on carers leave, long-term sick leave or had a new child
- Carried out reservist duties
- Lost a large contract
- Are eligible for the fifth grant but did not submit a 2019/20 return
Adjustments to this figure may also be needed if any of the following apply to you:
- If you have an accounting period longer than 12 months
- If you have an accounting period shorter than 12 months because you changed your accounting date
- If you have more than one business as a sole trader
The position for partners in trading partnerships can be more complicated and further information would be needed from the partnership to determine your reference year turnover.
HMRC has provided details on working our reference year turnover here.
April 2020 to April 2021 turnover
As well as working out your reference year turnover figure, you also need to work out your turnover for a 12-month period, starting on any date from 1st to 6th April 2020.
This figure will be relatively easy to find if you have already completed your 2020/21 tax return and drew accounts for a 12-month period, starting on any date from 1st to 6th April 2020. If you have, you can find your turnover from your submitted tax return.
If you haven’t submitted your return, you will need to work your turnover out. HMRC suggest several options may be available to you. For example:
- check your accounting software (if you use any)
- go through your bookkeeping or spreadsheet records that cover your self-employment invoices and payments received
- check the bank account you use for your business to account for money coming in from customers
You should remember to exclude anything reported as any other income on your tax return. You should also exclude any coronavirus support payments. For example, any previous SEISS grants you have received, any Eat Out To Help Out payments or any local authority or devolved administration grants.
As with the reference year figure, the position for partners in trading partnerships is more complicated and you may need further information from the partnership to determine your turnover.
HMRC provides further details on how to determine turnover here.
It is important to check that your figure is accurate. HMRC has advised that you will not be able to check your figures after you submit your tax return for this period.
Need further help?
For more details about the fifth grant, you may wish to view our online article and we have produced an easy to use calculator designed to help you estimate the fifth grant amount that you may be entitled to.
The rules for establishing the turnover figures are complicated and our accountants can calculate your turnover figures for you. To find out more, we offer free, initial consultations over the phone or by video call. Switching to TaxAssist Accountants is simple. If you’re curious about becoming a client and would like to find out more about our easy switching process please click here.
Date published 27 Jul 2021 | Last updated 13 Feb 2024This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
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