Everything you need to know about the 5th SEISS grant

20 August, 2021 · 7 min read
Author
Aidan Moran

HMRC are sending out emails inviting people to claim their 5th SEISS grant. Keep an eye out of the email as it’ll contain your personal claim date. Remember that in order to claim the grant, you’ll have to show that your business has been adversely affected by coronavirus between 1 May 2021 and 30 September 2021.

How is this grant different to previous SEISS grants?

This grant differs from previous grants in that you may have to take a Financial Impact Declaration Test (FID). This compares your turnover in the pandemic period with a reference period set by HMRC (usually the 2019/20 or 2018/19 tax year). Based on the outcome of this test you’ll either be entitled to 80% of your profits (capped at £7500) or 30% of your profits (capped at £2750) of the reference period.  

If you need to take an FID, you can calculate your turnover on the HMRC website.

What about businesses that aren’t three years old?

The good news is that if you only started your business or partnership in 2019/20, and haven’t been self-employed or a partner in the three previous tax years, you won’t need to complete the FID Test and will automatically qualify for the 80% grant.

What reference period should I use?

Most applicants should use the 2019/2020 tax year. However, you can use 2018/2019 if it more accurately reflects your typical 12 month turnover.  HMRC have provided some examples of when this may be appropriate – such as being on carers’ leave or having reservist duties.

What is my turnover?

Turnover is basically your sales, takings, fees and money earned during the basis period for the tax year. If you’re not sure what your basis period is then please see our other article explaining it. ANNA is also developing a very handy basis period calculator, and we’ll post more about that when it’s ready.  

To simplify matters your turnover can be found in your 2019/20 (or 2018/19 if that’s what you’re working with) tax return at the following boxes (depending on which type of return you filed):

  • SA200 completed: box 3.6 
  • SA103S: completed: box 9 
  • SA103F completed: box 15 
  • SA800 completed: box 3.24 or 3.29 (for partnerships)

Do I need to include the grants in my tax return?

You need to include all grants received from HMRC under the SEISS schemes in your tax returns. For 2020/21 there are three possible grants that you may have received, and they all need to be included in your tax return. The email you get from HMRC will explain more.  

This page has some good information on where to include the grants on your return. Be aware that where you declare the grant depends on the type of business structure you operate – if in doubt discuss it with your accountant.

Remember that if you weren’t trading in 2018/19 you don’t need to consider the turnover test and will automatically qualify for the 80% grant.

Am I eligible?

Here’s the key information. To qualify for the fifth grant, you need to meet all of the eligibility conditions. Normally, this means all of the following:

  • you must carry on a trade which has been  adversely affected  due to coronavirus;
  • you must have submitted your 2019/20 tax return on or before 2 March 2021; 
  • you must have carried on a trade in 2019/20 and 2020/21; 
  • you must intend to continue to carry on a trade in 2021/22 at the time you claim the grant; 
  • you must meet the profits condition for the fifth grant (see below);
  • your trade must have suffered reduced activity, capacity or demand in the period 1 May 2021 to 30 September 2021; 
  • at the time you make the claim, you must reasonably believe that you will suffer a significant reduction in trading profits for a ‘relevant basis period’ (see below) compared to what you would have reasonably expected if you had not suffered that reduced activity, capacity or demand.

Note: you can’t claim the fifth SEISS grant if your business has been affected solely because you, or someone you care for, has had to self-isolate in the UK following a trip overseas.

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