In the Budget, the Chancellor announced two new SEISS grants; the fourth grant to cover February to April, and the fifth grant covering May to September.
The final details have not yet been released, but some important points are known:
- Your 2019/20 tax return will be taken into account. This could mean that you become entitled when you weren’t before, but it could also mean that you lose entitlement.
- Your sales must be reduced due to the coronavirus
- The amount is 80% of normal trading profits for three months, with a maximum grant of £7,500
- The online claim system will open in late April
- HMRC will notify you if they think you are eligible
- Eligibility is the same as for the fourth grant
- Although the grant notionally covers five months, the amount is based on three months’ profit
- The grant depends on your turnover in the year to April 2021 compared to the previous 12 months:
- If it’s less than 70%, the grant is 80% of ‘normal’ profits (capped at £7,500)
- If it’s more than 70%, the grant is reduced to 30% of normal profits, (capped at £2,850)
- If it has increased, HMRC are likely to challenge your right to the grant
- The claim system should open in late July
We would recommend reviewing your 2019/20 tax return to see if it affects your eligibility, and your trading over 2020/21 to see if there could be a reduction in your fifth grant.
If you have any questions on this or any other tax or accounting issues, please feel free to contact us.