The fifth SEISS grant will only be paid to taxpayers who can show that their business turnover for 2020/21 has reduced, and to do that the taxpayer must provide two turnover figures as part of the grant application process.
The first figure is the actual turnover of the business in a 12 month period ending between 1 April 2021 and 6 April 2021. HMRC requires the total gross sales, including VAT, for this 12-month period irrespective of the accounting period the business normally uses.
The reference period to compare to is the turnover reported on the 2019/20 tax return. This will be the turnover for the accounting period that ends in 2019/20, not the turnover actually recorded in the tax year 2019/20. HMRC has generously said that if the 2019/20 year was abnormal the taxpayer can instead use the turnover reported on the 2018/19 tax return as the reference year.
The two turnover figures (2020/21 and reference year) will thus come from periods which are not immediately adjacent in time.
Complications are introduced where the reference period is not for 12 months or the taxpayer is trading as a partnership. Where the taxpayer has more than one trade, the turnover for all trades (but not property businesses) should be included.
Taxpayers will be contacted by HMRC later this month and given a date from which they can apply for the SEISS-5. The portal for applications will remain open until 30 September 2021.
As was the case for the earlier SEISS grants we expect that tax agents won’t be able to apply for the grant on behalf of their clients. We will thus have to work out the turnover figures for you and provide that information to you in advance of you attempting to apply for the grant.
Written by the Tax Advice Network