HMRC have published a policy paper giving details of the fifth Self-Employment Income Support Scheme (SEISS) grant which will be available from late July 2021. 

The fifth SEISS grant, available to self-employed individuals and members of a partnership, was announced at Budget 2021. 

Key conditions

The fifth grant has similar qualifying conditions to the fourth SEISS grant. To be eligible:

  • 2019-20 trading profits must be £50,000 or less and at least equal to non-trading income. 
    • Where taxpayers are not eligible based on 2019-20, HMRC will look at 2016-17, 2017-18, 2018-19 and 2019-20. 
  • Taxpayers must have traded in both 2019-20 and 2020-21.
    • The 2019-20 tax return must have been submitted on or before 2 March 2021. 
  • Taxpayers must: 
    • Be currently trading, but impacted by reduced demand due to Coronavirus, or
    • Have been trading but temporarily unable to do so due to Coronavirus. 
  • It will be necessary for grant claimants to declare that they: 
    • Intend to continue to trade, and
    • Reasonably believe there will be a significant reduction in their trading profits due to reduced business activity, capacity, demand or inability to trade due to Coronavirus from May 2021 to September 2021.
  • HMRC expects taxpayers to make an honest assessment about whether they reasonably believe their business will have a significant reduction in profits.
  • Evidence must be kept to demonstrate how the business has been impacted by Coronavirus resulting in less business activity than otherwise expected.

What is different?

The amount of the grant is determined based on how much turnover has decreased in the year April 2020 to April 2021.

Where turnover has decreased by: 

  • 30% or more.
    • The full grant of 80% of three months’ average trading profits, capped at £7,500, will be paid.
  • Less than 30%.
    • A reduced grant of 30% of three months’ average trading profits, capped at £2,850, will be paid.

Administration

  • As with previous grants, the grant is Taxable and paid in a single instalment. 
  • Claims can be made from late July 2021.
  • Eligible taxpayers will be contacted by HMRC in mid-July 2021 to confirm their earliest claim date. 
  • Further guidance will be available by the end of June 2021. 

Useful guides on this topic

COVID-19: Self-Employment Income Support Scheme (SEISS)
Support for the self-employed during the Coronavirus crisis. 

COVID-19: Government support tracker
This tracker covers measures announced by the government to support individuals and businesses, as we get through COVID-19.

COVID-19: Taxation of Coronavirus Support Payments
This guide summarises the tax treatment of grants paid during the Coronavirus pandemic.

External link

Policy paper: Self-Employment Income Support Scheme fifth grant


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