Wheelers Words

Stay up to date with all the latest accounting, tax and company news on our Wheelers Words blog posts.

Jun 4, 2021

Wheelers Words: Self-employment Income Support Scheme (SEISS) and Corona Virus Retention Scheme (CJRS) Update

Self-employment Income Support Scheme (SEISS)

HMRC have now released details of the 5th SEISS grant which will be available to apply for from the end of July. Guidance on how to claim the grant will be available from the end of June and if HMRC believe you may be eligible to claim they will contact you in mid-July. A word of caution though, just because HMRC contact you does not mean that you meet the tests to claim the grant. The grant is self-assessed and is subject to HMRC checking after it is paid.

The grant covers the period from May to September and as with the previous grants cannot be submitted by us as agents. It is open to all those who are eligible regardless of whether they have claimed any other grants. The conditions are as follows:

  • Traded in 2019/2020 and are continuing to trade in 2020/2021
  • A tax return for 2019/2020 must have been submitted by 2 March 2021

Income Tests

  • Average trading profits must be £50,000 or less
  • Trading income must be at least equal to non-trading income (50% test)

The amount of grant will be based on how much turnover has been reduced in the tax year to 5/4/2021.

Turnover reduction How much will be paid Maximum grant
30% or more 80% of 3 months average trading profits £7,500
Less than 30% 30% of 3 months average trading profits £2,850

All the SEISS grants will be taxable in the year received, which may be different to your accounting period. Please make sure we know of any grants received before 5/4/2021 when we prepare this year’s tax returns on your behalf.

We fully expect HMRC to investigate the validity of grant claims, so it is important to realise that the claim could be challenged at a later date and have to be repaid.

Corona Job Virus Retention Scheme (CJRS)

The CJRS scheme remains open for claims subject to the same principles as set out previously. The scheme is due to change on 1st July, whereby employers will be expected to contribute 10% of the furlough wages being paid. This will result in 80% still being paid to the employee, 10% by the employer and Employers National Insurance. The maximum furlough claim will therefore be £2,187.50 per person for unworked hours.

From 1st August, the furlough claim amount reduces to 60% (cap of £1,875) until the closure of the scheme at the end of September.

It is important to note that HMRC can and are investigating CJRS claims by employers. They are not just checking calculations, but also the eligibility to claim. The scheme is designed for employers who are suffering a downturn due to the impact of COVID-19 and not just for normal holidays or annual shutdowns.