SEISS 5th grant claim: What is turnover and how is it calculated?
Martin Lewis provides warning on fourth SEISS grant deadline
When you subscribe we will use the information you provide to send you these newsletters. Sometimes they’ll include recommendations for other related newsletters or services we offer. Our Privacy Notice explains more about how we use your data, and your rights. You can unsubscribe at any time.
The fifth and final instalment of the Self-Employment Income Support Scheme (SEISS) is expected to open for applications in late July. As of today, further guidance on the fifth grant is now available on the Government website, after initially being scheduled for release in late June. Read on to find out more about turnover, how it is calculated for SEISS grants and how it will impact claims.
What is turnover?
According to the Government website, turnover includes the “takings, fees, sales or money earned or received by your business”.
When working out turnover for grant five, anything reported as any other income on tax returns does not have to be included.
This includes things like previous SEISS grants, local authority or devolved administration grants or Eat Out to Help Out payments from last year.
Claimants will need to comb through their figures from their records, such as via accounting software or their 2020/2021 Self-Assessment tax return, if they’ve completed it, to apply for SEISS grant five.
How is turnover calculated?
When submitting a claim for SEISS grant five, claimants will need to inform HMRC about their turnover if they submitted a tax return for 2019/2020, along with any of the 2018/2019, 2017/2018 and 2016/2017 tax years.
Claimants will need to have some figures to hand when they make their claim for SEISS grant five.
Before making a claim, applicants should work out their turnover for the 12-month period starting from any day between April 1, 2020, to April 6, 2020.
Then claimants will need to find their turnover from either 2019/2020 or 2018/2019 and this will be used as a reference year.
The Government website explains: “You need to work out your turnover for a 12-month period. Your period must start on any day from April 1, 2020, to April 6, 2020.
“You should check that your figure is accurate. HMRC will be able to check your figures after you submit your tax return for this period.
“Your figure must include the turnover from all of your businesses.”
Further information on how turnover should be calculated and used for SEISS applications can be found on the Government website HERE.
DON’T MISS:
Self-employed grant: THREE things to be aware of before applying [INTERVIEW]
SEISS: HMRC issues vital update on self-employment grant 5 [INSIGHT]
SEISS application: When will the Government gateway open for claims? [ANALYSIS]
How will turnover impact the fifth grant amount?
Unlike previous SEISS grants, SEISS grant five is calculated based on how much someone’s turnover has been affected.
This means some people will receive a larger grant than others if their business has been impacted more by COVID-19.
These conditions for SEISS grant five were announced by the Chancellor, Rishi Sunak, in the Budget earlier this year.
Dan Stopp, UK Accounting Manager at Bokio, explained to Express.co.uk: “The fifth SEISS grant is slightly different to the previous instalments, in that the amount claimants will receive will be determined by how much their turnover has been reduced during the last financial year.
“For those who have experienced a reduction in turnover of 30 percent or more, the amount received is identical to that of the fourth SEISS grant, namely a grant worth 80 percent of three months’ average trading profits with a cap of £7,500.
“However, those with a reduction in turnover of less than 30 percent will receive a grant equating to 30 percent of three months’ average trading profit with a cap of £2,850.”
Although the grant covers May to September 2021, it is important to note the grant will only be worth a percentage of three months’ average trading profits.
Source: Read Full Article