Martin Lewis grills Rishi Sunak over SEISS timetable
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SEISS was extended on March 3 by Chancellor Rishi Sunak during his Budget. The new grant will cover the period July to September, and the Treasury has confirmed the money will continue to support sole traders and freelance workers. Alongside Grant 5, there’s also a fourth grant covering the months February, March and April 2021, with applications for this grant due to open at the end of April. Prior to unveiling the extension, Mr Sunak said: “Our Covid support schemes have been a lifeline to millions, protecting jobs and incomes across the UK.” He added: “There’s now light at the end of the tunnel with a roadmap for reopening, so it’s only right that we continue to help businesses and individuals through the challenging months ahead and beyond.”
How is grant 5 worked out?
Speaking to Express.co.uk, Lee Murphy, managing director at the Accountancy Partnership said: “Unlike the fourth grant, SEISS 5 takes more of an impact-based approach to the level of funding available.
“Currently, the fourth grant provides a funding flat rate of 80 percent of three months’ worth of average trading profits up to a maximum limit of £7,500 per claim.
“The fifth grant, on the other hand, will award funding at two levels.
“Self employed claimants whose businesses have suffered a drop in turnover of 30 percent or more can claim 80 percent of average monthly trading profits capped at £7,500.
“Claimants whose businesses which have experienced a turnover drop of under 30 percent are only entitled to claim 30 percent of average monthly trading profits capped at £2,850.”
In terms of how the next grant will be calculated, Mr Murphy said the details are “still incredibly sparse” but the turnover reduction in the tax year April 2020/2021 will be considered.
He added: “The fifth grant becomes available after the end of the 2020/2021 tax year, so it will likely look at those 12 months’ worth of turnover compared to the previous year.
“A business’s turnover is the total amount recorded or invoiced as a sale before any costs or taxes are applied to the funds.”
How much could you be paid?
In terms of how much you could get, that all depends on how much money your business has made this year.
If you’re able to prove your profits have been reduced as a result of the pandemic, then you could get the full amount of £7,500 in the last SEISS quarter.
Kath Hiscock from Seamount Accountancy told Express.co.uk: “The fifth grant covers May to September and can be accessed sometime in July to make a claim.
“As accountants, we’re asked what the grant will be made up of on a daily basis, but we don’t expect the current guidelines to change.”
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The current qualifiers for SEISS 5 are the same as those mentioned above, and includes the full amount for turnover reduction of 30 percent and £2,850 for those with turnover loss of less than 30 percent.
Ms Hiscock said there has been “some confusion around trading profits” and what the actual definition of this term is.
She explained: “In simple terms, this means that you can be employed and have self-employed income and it is the profits from that self-employment which can be considered for a grant.”
In good news for recent traders, Mr Sunak said those who started trading in 2019/2020 are now eligible for the next two rounds of SEISS.
This reform has been welcomed by millions of people who weren’t able to claim any income through the roughest financial period in recent history.
Mr Sunak was urged to make reforms to the scheme in an effort to be more inclusive, and as a result more than half-a-million people are now eligible.
The Chancellor said: “When the scheme was launched, the newly self-employed couldn’t qualify because they hadn’t all filed a 2019/2020 tax return.
“But as the tax return deadline has now passed, provided they filed a tax return by midnight last night [March 2], over 600,000 more people, many of whom only became self-employed last year, can now claim the fourth and fifth grants.”
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