New SEISS grant (3)
HMRC have announced the new SEISS grants covering into 2020/21 - the claims date has been brought forward and you can apply from 30 November!!
The grant amount has also increased from 40% to 55%;
November 80% grant
December and January 40% grant
Maximum payment £5160
HMRC confirmed the process will be the same as before, and you will need to apply for this online via your government gateway account.
Unfortunately, the 3rd and 4th SEISS grants are only available to those who were eligible to claim the first 2 grants confirming that those tax payers who did not complete the self employed pages on a 2018/19 tax return, or whose income from self employment was less than 50% of their total income, will not be eligible to receive a grant. If you feel you have received a previous SEISS incorrectly click here
Find out more about the extension to the scheme.
HMRC will assess your eligibility for the grant based on your total income and trading profits.
You can use this guide from their website to find out if you’re eligible and how much you may get.
Trading profits
HMRC will use the figures on your tax returns for your total trading income (turnover), then deduct any allowable business expenses and capital expenditure.
Allowable expenses include:
office costs, for example stationery or phone bills
travel costs, for example fuel, parking, train or bus fares
clothing expenses, for example uniforms
staff costs, for example salaries or subcontractor costs
things you buy to sell on, for example stock or raw materials
financial costs, for example insurance or bank charges
costs of your business premises, for example heating, lighting, business rates
advertising or marketing, for example website costs
training courses related to your business, for example refresher courses
It also includes:
any business expenses deducted through the trading allowance
capital allowances, used to buy assets used in your business
qualifying care relief
flat rate expenses
HMRC will not deduct from your trading profits:
any losses carried forward from previous years
your personal allowance
Example 1
If your total trading income (turnover) in each of the tax years 2016 to 2017, 2017 to 2018 and 2018 to 2019 was £20,000, and you claimed the £1,000 trading allowance each year.
This is worked out as:
£20,000 deduct the trading allowance of £1,000 = £19,000
Multiply £19,000 by 3 = £57,000
Divide £57,000 by 3 = £19,000
Your average trading profit would be £19,000.
If you have more than one trade in the same tax year
We will add together all profits and losses for all these trades to work out your trading profit.
Example 2
If you only traded in the tax year 2018 to 2019, and made a £60,000 profit for your first trade, and then a £20,000 loss for your second trade, your trading profit for that year would be:
Trade 1 £60,000 profit deduct trade 2 £20,000 loss = £40,000
If you traded for more than one year
To work out your average trading profit we will add together all profits and losses for all tax years you’ve had continuous trade.
Example 3
If you made:
£60,000 profit in tax year 2016 to 2017
£60,000 profit in tax year 2017 to 2018
£30,000 loss in tax year 2018 to 2019
Add £60,000 and £60,000 then deduct £30,000 loss = £90,000
Then divide £90,000 by 3
Your average trading profit for the 3 tax years would be £30,000.
Example 4
If you did not trade in tax year 2016 to 2017 but made:
£25,000 of profit in tax year 2017 to 2018
£45,000 of profit in tax year 2018 to 2019
Add £25,000 and £45,000 = £70,000
Then divide £70,000 by 2
Your average trading profit for the 2 tax years would be £35,000.
Total income
Your total income is the total of all your:
income from earnings
trading profits
property income
dividends
savings income
pension income
miscellaneous income (including social security income)
Eligibility
Your trading profits must be no more than £50,000 and more than half of your total income for either:
the tax year 2018 to 2019
the average of the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019
Example 5
Your trading profits must be no more than £50,000 and more than half of your total income for either:
the tax year 2018 to 2019
the average of the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019
2016/17 2017/18 2018/19 Ave for 3 years
Trading profit £50,000 £50,000 £(10,000) £30,000
Pension scheme £15,000 £15,000 £15,000 £15,000
Total Income £65,000 £65,000 £ 5,000 £45,000
Trading profit is Yes Yes No Yes
more than half of your total income
So even if you made a loss in the tax year 2018 to 2019, you would still be eligible for the grant because your average trading profit for the 3 tax years:
is £30,000 - which is less than £50,000
is more than half of your total income of £45,000
There is further help available here, including the Hardship scheme