SEISS update: HMRC alters eligibility rules for fifth grants – everything you need to know

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SEISS has helped millions of self-employed workers over the last year or so and from late July, freelancers will be able to make a claim for a fifth grant if they’re still impacted by coronavirus. Ahead of this, HMRC has updated its rules on turnover reporting.

To be eligible for a fifth SEISS grant, a claimant must meet all criteria stages which are split into three sections.

Stage one: Your trading status and when you must have traded

Claimants must be a self-employed individual or a member of a partnership.

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They must also have traded in 2019 to 2021 tax years.

It will not be possible to claim a grant if the claimants traded through a limited company or trust.

Stage two: Tax returns and trading profits

Claimants must have submitted their 2019 to 2020 tax return on or before March 2, 2021, have trading profits of no more than £50,000 and their trading profits must be at least equal to their non-trading income.

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Non-trading income is defined as any money made outside of the business, for example, if the claimant also has a part-time job or pension.

If a claimant is not eligible based on the trading profits in their 2019 to 2020 return, HMRC will then look back at previous years.

Eligible claimants should be contacted by HMRC soon if they’re eligible, if they haven’t been already.

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Stage three: Deciding if you can claim

When making a claim, claimants must tell HMRC that they intend to keep trading in 2021 to 2022, and they “reasonably believe there will be a significant reduction in their trading profits due to the impact of coronavirus between May 1, 2021 and September 30, 2021.

HMRC noted the fifth grant will be different from previous grants.

It explained: “In most cases, when making your claim you’ll need to tell us about your business turnover so we can work out your grant amount.

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“Turnover includes the takings, fees, sales or money earned or received by your business.

“To make your claim, you’ll need to have two different turnover figures. You’ll need to work out your turnover for: April 2020 to April 2021 and either 2019 to 2020 or 2018 to 2019.”

HMRC will then compare these figures to work out how much is paid out.

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