Self Employed Income Support Scheme

July 2021 Update

HMRC have announced some details regarding the 5th SEISS grant, which will be available at the end of July, until September 2021.

Whilst the eligibility criteria is similar to previous grants, HMRC state that you must have seen, or be expecting to see, a significant reduction in profits; and that your activity, capacity and demand has been impacted due to covid, between 1 May 2021 and 30 September 2021.

HMRC official guidance (external link)

They have also given a detailed insight as to what they mean by ‘significant reduction, impacted by reduced activity, capacity and demand’ (Click here, external link)

HMRC have not provided us any additional guidance or information, and they have made it very clear to us that we should not be advising self-employed clients on whether or not to to claim the grant. We will, of course, help provide the relevant figures required.

If you feel you have been impacted during this period then you will need to provide HMRC with some evidence and additional information.

HMRC will use information declared on your previously submitted tax returns; but they will also need to know your TURNOVER figure for the 2021 tax year.  

Turnover is the amount of money you get paid in sales, takings, earnings etc. It does not include any council or government grants.

If you have already submitted your 2021 tax return, then we will have declared this figure on the tax return; and we can confirm it with you.

If you have not already submitted your books to us for preparing, then you have two options –

  1. Bring your books in ASAP, for us to calculate it as part of the work we do for your tax return. Please note, due to increased demand we are currently working at a 6-7 week turnaround.
  2. Calculate your turnover yourself. HMRC guidance on how to work out your 2021 turnover (external link). For those of you that are in a partnership, or have accounting periods / year ends that differ to the 5th April tax year, there will be extra complications and calculations required.

HMRC use the level of drop in turnover to determine the % of grant you may receive; the figures are not used to calculate the actual grant. The grant is still based on declared profits over the previous years.

Just a word of caution.  Please bear in mind that whilst the turnover for the 2020-2021 year might show a drop due to the number of National and Local lockdowns during this period; your turnover and profit levels for this current (2021-22) tax year may not have dropped as much.   This 5th grant (along with the 4th, if claimed) will form part of your taxable income, and will be declared on your 2022 Tax Return.   This may mean you could see an increase in your tax and national insurance liabilities (along with possible higher rate tax, student loan deductions and repayment of child benefit).

Last updated 5pm, 12th July 2021

The above is our understanding of this policy and how this will work based on the information published so far. It should not be relied on for advice at this stage but is intended to give an indication of how the scheme will work.