Coronavirus Self-Employed & Small Limited Company Help

Eligibility quick questions

Step 2: The maximum you can get depends on profits

Now that you have a clear picture of whether you're eligible, the next step is to figure out how much you may be able to claim:

• The grant is capped at £7,500. This means the most anyone can claim (regardless of their individual circumstances) is £7,500 - this amount is the same as grants 1, 3 and 4. Grant 2 was capped at £6,570.  
  
  
• The amount you could claim is based on 80% of three months of your average trading profits. Your average trading profits are worked out from your tax returns (see below) but due to the cap - even if 80% of three months' worth of your average trading profits work out to be more than £7,500, you won't be able to claim more. 
  
  
• To work out your average trading profits HMRC will use up to four years of tax returns. If you've traded and submitted tax returns for 2016/17, 2017/18, 2018/19 AND 2019/20 - all the profits and losses will be added together and divided by four (then divided by four again to get the three-months worth of profit figure). 
  
  - If you didn’t submit tax returns for all four years, the grant will be based on your most recent consecutive returns. 
  
  - If you did not trade in two consecutive years, your average trading profit will be just based on your most recent return(s). So if you submitted 2016/17 not 2017/18 then 2018/19 and 2019/20 it would only be the last two that counted.
  
  
• Losses in a year can affect claims. If you made a loss in one of the tax years that counts, this will reduce your overall average earnings.

For previous grants, this would have been it. You'd have got 80% of your average trading profits over three months (subject to the cap). But unlike all the other grants, for this 5th grant there's an extra step in determining how much you'll get. Read on to see how this works. 

For the first time, the SEISS grants are not "all or nothing". There are now two levels of grant available - a higher amount of 80% of three months of average trading profits or a lower amount of 30% of three months' worth of average trading profits.

Which you'll get - unless you’re newly self-employed - depends on the extent of your drop in turnover. To work this out, you will need to give HMRC two different turnover figures so they can compare how your business fared during the pandemic and how it performed before it. 

Here's what you need to do:  

• First, you need to get your turnover figures for 2020/21. Turnover includes takings, fees, sales or money earned by your business. You should NOT include past SEISS grants and other Covid support, such as "Eat Out to Help Out" payments, local authority or devolved administration grants. 
  
  - To find your figures, you'll need to refer to your self-assessment tax return - if you have already completed it. (Help if you're not sure where to find it). 
  
  - If you've not yet completed it, you can also ask your accountant or tax adviser (if you have one) to check the accounting software you use for your business, or you can go through your bookkeeping or spreadsheet records that cover invoices and payments received, or you can check the bank account you use for your business to account for money coming in from customers. 
  
  - Many people have accounting periods that fall outside of 12 months. This is not a problem, but you'll need to work out your 12-month figure.
  
  For example, if you have a 15-month accounting period and declared a turnover of £45,000 on your 2020 to 2021 tax return: To get your 12-month turnover for 2020/21 you need to divide your 15-month figure by 15 to get your turnover for 1 month, then multiply this by 12. 
  
  
• Next, you'll need to find your turnover "reference" figure - for most this will be your turnover in the 2019/20 tax year. This is the figure that HMRC looks at to see how your business performed before the pandemic. In most cases will be tax year 2019/20. If this was not a normal year for your business (eg, you were on maternity leave etc), you can use your reported turnover from 2018/19 instead.
   
  You can find this figure on your tax return. For previous years' tax returns log into your personal tax account; check your business records, or ask your accountant if you have one. 
  
  
• HMRC then uses difference between your 2020/21 turnover figure and your pre-pandemic "reference turnover figure" to determine whether you get the higher or lower amount. Then...
  
  - If your turnover's fallen by 30% or more you'll be able to claim the full 80% of the three months’ average trading profits you worked out in step two (capped at £7,500).
  
  - If your turnover's fallen by less than 30% you'll be able to claim a grant worth 30% of the three months' average trading profits you worked out in step two. In this category, the maximum grant is £2,850. 
   
  
• The newly self-employed who started trading in 2019/20 automatically get the maximum grant. If you started trading in 2019/20 you will be able to claim the maximum grant amount worth 80% of three months’ average trading profits - without a turnover test, as there are no previous figures to compare your turnover to.
  
  
• Extra help is available from HMRC. Guidance is available online. You can also speak to an adviser online about the scheme, use HMRC’s digital assistant or call 0800 024 1222 - but bear in mind the line is extremely busy and there are fewer advisers due to coronavirus. 

How to make a claim – deadline's 30 Sept

Claiming online is the quickest and easiest way. HMRC. You can claim online by searching for 'SEISS' on the Gov.uk website until 30 September 2021.  

To make your claim, you'll need:

• Turnover figures for April 2020 to April 2021 and 2019/20 and/or 2018/19.  
• Your National Insurance number
• Self Assessment Unique Taxpayer Reference (UTR) number
• Government Gateway user ID and password
• Bank account number and sort code, and roll number for a building society account  

When will I get my money?

After you've submitted your claim, HMRC will do checks to confirm the details and pay the money into your bank account within six working days of receiving your claim.

While receiving a SEISS grant in the past isn't an automatic reason for mortgage rejection, sadly some have been told it is evidence of business viability problems (as by applying you declared you needed help) and have been rejected.

Though receiving an earlier grant but not a later one can sometimes be viewed as evidence of a turnaround.

In June, MSE asked 13 lenders and six explicitly said they wouldn't take SEISS grant money into account, while only two said they would - the rest were vague. 

As for whether those who are eligible, and struggling, if you need the cash, do it - mortgage savings are usually no substitute for direct cash being paid into your account.

For those struggling to get a mortgage due to these schemes, product transfers from your existing lender, and using mortgage brokers, are the best routes to navigate through this.