Guidance On SEISS Turnover Test Issued By HMRC

The fifth (and final) SEISS grant has been available for the self-employed to claim since the end of July. HMRC has been contacting those traders that are eligible to claim it.

The eligibility criteria remain broadly the same as the fourth grant. Self-employed profits in 2019/20 must not exceed £50,000 and must be more than 50% of your total income. If that test is not met, then the same £50,000 and 50% tests are applied to average profits and total income over the four fiscal years to 2019/20.

Self-employed traders need not have claimed grants under the previous scheme to qualify for the July payment and are required to confirm that their business continues to be adversely affected by Covid-19. The amount that traders are able to claim depend on how much their turnover has reduced by. If the reduction is more than 30% the grant is 80% of average profits capped at £7,500 but if less than 30% only 30% of average profits, capped at £2,850.

Details of the turnover comparison have now been issued by HMRC. Firstly, traders need to calculate the turnover from their business(es) for a twelve-month period commencing between 1 April and 6 April 2020.

That figure is then compared with the turnover reported in the 2019/20 self-assessment tax return, referred to as the reference year. If 2019/20 was not a normal year, for example they were on carers leave, long term sick leave or had a new child then it is possible to use 2018/19 turnover.

Note that coronavirus support payments such as SEISS, eat out to help out, and local authority grants should be excluded from the turnover figure.

For members of a partnership or LLP the turnover comparison is based on the turnover of the partnership. However, where the partner also has another business a proportion of partnership turnover is used.

Like previous SEISS grants agents are not permitted to make claims on your behalf but we can assist you in determining your turnover and checking the amount that you are entitled to.

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