The 5th round of Government Support under the Self-Employed Income Support Scheme

For those of you who are self-employed – we are aware you have been receiving emails this week regarding the above. The 5th grant is different than the previous four, as it is calculated with reference to a drop in turnover levels rather than either experiencing COVID challenges or a drop in profits as was the case historically.

 

Turnover includes the takings, fees, sales or money earned or received by your business.  It does not include VAT or previous SEISS grants.

 

To make your claim, you’ll need to have 2 different turnover figures.

·         a 12-month period starting between 1 April 2020 and 6 April 2020 – normally your Accounting period will run 01/04/20- 31/03/21 or 06/04/20 to 05/04/21

 

·         then either the same dates for 2019 to 2020 or 2018 to 2019

This is the HMRC link to determine your turnover or alternatively please call us and we will provide you with the information you require.

 

Find out how to work out your turnover so you can claim the grant

When you do not need turnover figures to claim

If you started trading in 2019 to 2020 and did not trade in the earlier Tax years:

·         2018 to 2019

·         2017 to 2018

·         2016 to 2017

Your turnover figures are not needed

There are 2 levels of grant. HMRC will work out your grant amount based on how much your turnover has reduced by comparing the two turnover figures.

If your turnover is down by 30% or more. You’ll get 80% of 3 months’ average trading profits  Maximim grant amount £7,500

If your turnover is less than 30%. You’ll get 30% of 3 months’ average trading profits  Maximim grant amount £2,850

Example

If your average trading profits were £42,000 over the last 4 tax years.
  1. Start with your average trading profit (£42,000).
  2. Divide by 12 = £3,500.
  3. Multiply by 3 = £10,500.
If you’re eligible for the higher grant:
  1. Work out 80% of £10,500 = £8,400.
  2. You’ll get the maximum grant of £7,500.
If you’re eligible for the lower grant:
  1. Work out 30% of £10,500 = £3,150.
  2. You’ll get the maximum grant of £2,850.

How to make a claim

The online service for the 5th grant will be available from late July 2021.

HMRC will contact you in mid-July to give you a date that you can make your claim from. It will be given to you either by email, text message, letter or within the online service.

You can check a list of genuine HMRC contacts if you receive any suspicious texts, calls or emails claiming to be from HMRC as this may be a scam.

How the grant is treated

The grant is subject to Income Tax and Self-Employed National Insurance Contributions. It must be reported on your 2021 to 2022 Self-Assessment Tax Return.

The grant also counts towards your annual allowance for pension contributions. SEISS grants are not counted as ‘access to public funds’ and you can claim the grant on all categories of work visa.

Bounce Back Loans

The government has announced a new bill that will allow HMRC and The Insolvency Service to go after directors retrospectively, who dissolved their companies improperly leaving outstanding debts, including bounce back loans or tax.

The Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill will allow retrospective investigation and action to be taken against directors and can lead to disqualification and personal liability if they are found to have dissolved their company with outstanding debts, which would include an overdrawn Directors Loan account.

This is the first time, authorities will have the power to investigate company dissolutions and strike offs that have happened in the past.

It is proposed that the Insolvency Service and HMRC will be able to investigate the circumstances of dissolution to make sure it was completed properly.

The aim is to force directors planning to close down to look at their liquidation options more closely as the proper method to end their business, rather than taking their chances with a more risky dissolution.

If anyone has any concerns, or would like advice in this regard – please don’t hesitate to get in touch.

SME Brexit Support Fund

You can now apply for the SME Brexit Support Fund.

Smaller businesses can get up to £2,000 to pay for practical support, including training or professional advice to adjust to new customs, rules of origin and VAT rules when trading with the EU post Brexit.

This fund is a recognition by HMRC that Brexit has impacted those that buy and sell goods from and to the EU

Who will be able to apply

Your business must:

  • be established in the UK
  • have been established in the UK for at least 12 months before submitting the application, or currently hold Authorised Economic Operator status
  • not have previously failed to meet its tax or customs obligations
  • have no more than 500 employees
  • have no more than £100 million turnover
  • only import or export goods between Great Britain and the EU, or move goods between Great Britain and Northern Ireland, if you already import or export goods from or to a non-EU country you are not eligible for his grant

Your business must also either:

  • complete (or intend to complete) import or export declarations internally for its own goods
  • use someone else to complete import or export declarations but requires additional capability internally to effectively import or export.

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THIS ARTICLE WAS WRITTEN BY

The England and Company Team

The England and Company Team

Our experts include: Chartered Certified Accountants, Chartered Tax Advisors and Registered Auditors.

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