There are some notable dates and changes on the horizon when it comes to the Government’s Plan for Jobs and the loans, tax relief and cash grants that are available.
Here you will find an overview of the latest deadlines, adjustments to some of the financial support schemes and points of interest.
Self-Employment Income Support Scheme
More detailed guidance is due to be published ahead of the fifth Self-Employment Income Support Scheme (SEISS) grant opening. However, there are some key differences between this grant and the ones that preceded it that are helpful to share at this stage.
Calculating the grant
A reminder that, the fifth grant will be determined by a turnover test. This test will detail how much your turnover has reduced in the 2020-21 tax year compared with pre-coronavirus trading.
If you are planning on applying for the fifth SEISS grant, it will be helpful to ensure all records are up to date, so that turnover for the year April 2020 to April 2021 is readily accessible.
- If turnover reduced by 30% or more, the grant will be 80% of three months’ average trading profits (capped at £7,500); and
- If turnover reduced by less than 30%, the grant will be 30% of three months’ average trading profits (capped at £2,850).
HMRC have advised that if you were not eligible for the fourth SEISS grant, then you will also not be eligible for the fifth. This is because the same tax returns are being used to determine eligibility for both grants.
Applicants will need one form of identity and three months’ worth of UK bank statements from the 2019-20 tax year to claim under the SEISS scheme.
The same pre-claim checks that were carried out ahead of the fourth grant opening, will also be performed ahead of the fifth.
HMRC will be contacting up to 27,000 potentially eligible claimants. They will be contacted on the number provided in their 2019-20 Self-Assessment tax return to verify their identity and business activity.
Self-assessment tax returns
SEISS grants are taxable and subject to self-employed National Insurance contributions. This means the amount you receive for any SEISS grant must be reported on your tax return.
If you prepare your own tax return, please note that on the 2020-21 tax return, SEISS grants should only be reported in the following boxes.
- Box 70.1 on the Self Employment (Full) page of the tax return;
- Box 27.1 on the Self Employment (Short) page of the tax return;
- Box 9.1 of the partnership supplementary pages of the tax return; and
- Box 3.10A of the SA200 (Short) tax return.
- SEISS grants should not be reported as turnover or ‘any other income’.
If M+A Partners prepares your tax return, please advise us of any SEISS grants you have claimed when completing the Self-Assessment Checklist.
If you have made any adjustments to your tax returns for 2016-17 to 2019-20 on or after 3 March 2021, you will need to check if your claim for the fourth grant has been affected. Click here to find out what to do if you need to pay back some or all of a SEISS grant.
Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme (CJRS) enables you to claim 60% of furloughed employee’s usual wages for the hours not worked.
You must also pay the associated employee tax and National Insurance contributions to HMRC. Please be aware that if these are not paid, the whole CJRS grant must be repaid and you may not be eligible for future grants. Time to Pay arrangements are available for paying tax liabilities.
Employers must not claim under the CJRS for any hours that their employees work. HMRC are carrying out compliance checks to identify error and fraud in claims.
For the period 1 August – 30 September 2021
- Employers can claim 60% of an employee’s usual salary for hours not worked;
- Up to a maximum of £1,875;
- Employers will be asked to contribute 20% of an employee’s usual salary for hours not worked;
- Up to a maximum of £625 per month; and
- Employers will be asked to cover National Insurance and employer pension contributions.
The CJRS calculator has been updated to help you plan for July – September claims. The calculator can be used for most employees who are paid either regular or variable amounts each pay period. Click here to access the CJRS calculator.