New rules for the fifth self-employment grant

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Date: 20 July 2021

Self-employed workers can now claim the fifth and final government grant but to be eligible they must demonstrate that their turnover has fallen as a result of the pandemic.

Self-employed workers are being invited to claim the fifth Self-Employed Income Support Scheme (SEISS) grant if they "reasonably believe there will be a significant reduction in trading profits due to the impact of COVID-19 between 1 May 2021 and 30 September 2021".

In addition, a new turnover test means that they must also prove that their turnover has fallen during the pandemic. The new rules mean that claimants will need to work out two different turnover figures: April 2020 to April 2021 and either 2019 to 2020 or 2018 to 2019. HMRC will compare these figures to work out how much claimants will get.

If you have more than one business as a sole trader, your figure must include the total turnover from all of your businesses including any new ventures started between April 2020 and April 2021.

Claimants should not include any coronavirus support payments in their turnover calculations, such as:

  • Previous SEISS grants;
  • Eat Out to Help Out payments;
  • Local authority or devolved administration grants.

Those workers whose turnover is down 30% or more will get 80% of three months' average trading profits to a maximum of £7,500. Those whose turnover has fallen by less than 30% will get 30% of three months' average trading profits to a maximum of £2,850.

HMRC's online service to claim the fifth grant will be available from late July. SEISS claimants must also meet the following criteria:

  • You must be a self-employed individual or a member of a partnership;
  • You must have traded in 2019 to 2020 and in 2020 to 2021;
  • You must have submitted your 2019 to 2020 tax return on or before 2 March 2021;
  • Your trading profits must be no more than £50,000; however, if you are not eligible based on the trading profits in your 2019 to 2020 return, HMRC will look back at previous years.

Anyone who started trading in 2019/20 and did not have any self-employment or partnership income in any of the previous three tax years does not need to take a turnover test and will be eligible for the higher grant.

Written by Rachel Miller.

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