September 28, 2021
The Self-Employment Income Support Scheme has indeed come in handy for businesses during trying times. A business can claim the fifth grant if the business owner feels that the profits generated by the business will be negatively hit by the still prevalent Covid-19 pandemic. The fifth grant covers the profit period between the 1st of May 2021 and the 30th of September 2021. Of course, before making the claim eligibility would first have to be factored in on areas apart from the above. Furthermore, the claim needs to be made on (or after) the ‘personal’ claim date given by the HMRC to you. The fifth grant was already set ready to open for the claims process from the end of the month of July 2021. Thus, if you are on the look out of an accountant who offers you tax services, you can score an additional point too, by taking some advice on the grant application process.
Important to note on this vein is that unlike the four previous SEISS grants, the fifth one is supposed to differ in the way the pay-outs will be calculated. In a nutshell the fifth grant will:
What should your active trading period have been?
The tax years to be considered would be the previous tax years i.e., 2019-20 and 2020-21 and should have submitted their self-assessment tax returns on and before 2nd March 2021 (for year 2019-20). Also, for the current tax year 2021-22 you should be in active trading and also want to continue doing so.
How is your eligibility calculated by the HMRC?
Your self-assessment tax return of the year 2019-20 would be first considered by the HMRC. The trading profits need to be at maximum £50,000 or at the very least at equal ratio to what your non-trading income is. It is possible that you might not be deemed eligible on the basis of the 2019-20 tax return. In this case, you need not worry as HMRC will then turn their attention to the previous tax returns you have submitted right from 2016-17 right up to 2019-20.
What has to be declared prior to making the claim?
The reason behind the grant is that the government wants businesses to continue trading. The grant is a way of providing a helping hand. Hence, you need to confirm your intention of continuing to trade through the present tax year 2021-22. They need to also explain they believe that their trading profits have been affected by the coronavirus between the period of the beginning of May 2021 to the end of September 2021.
How is the fifth SEISS grant calculated by the HMRC?
If the turnover was reduced by 30% (period between April 2020 and 2021) then you will get 80% of three months of the average trading profits (to a maximum of £7,500). However, if the business had a less than 30% reduction in the turn over in the above stated period then the percentage falls from 80% to 30% of entitlement towards three month’ trading profit average which is capped at £2,850.
Doshi Accountants can assist in making the accounting and taxation aspect of your business duties easier. Though a self-employed grant would have to be claimed for by yourself, you can get the right advice.