HMRC has issued guidance on claiming the fifth and final self-employed Income Support Scheme (SEISS) grant.

Unlike previous SEISS grants the amount of the fifth grant available is determined by how much a self-employed individual’s turnover is reduced.

The fifth grant is 80% of three months’ average trading profits capped at £7,500 for those self-employed individuals whose turnover has reduced by 30% or more. Those with a turnover reduction of less than 30% will receive a grant based on 30% of three months’ average trading profits, capped at £2,850.

Claims must be made by 30 September 2021. It is the taxpayer who must make the claim, an accountant or agent cannot submit the claim on their behalf.

Before making a claim taxpayers must:

• work out their turnover for a 12-month period starting from 1 April 2020 to 6 April 2020
• find their turnover from either 2019/20 or 2018/19 to use as a reference year.

HMRC advises taxpayers will need to have both figures ready when they make their claim.

A taxpayer can calculate their turnover for 2020/21 in a number of ways:

• by referring to their 2020/21 self assessment tax return if this has already been completed
• checking the figures on their accounting software
• reviewing their bookkeeping or spreadsheet records that detail their self-employment invoices and payments received
• checking the bank account they use for their business to account for money coming in from customers
• by asking their accountant or tax adviser for help in calculating the figures. However accountants and agents are unable to make the claim on the taxpayer’s behalf.

Claiming the fifth SEISS grant is not straightforward so please contact us for advice on determining your turnover figures or eligibility.

Internet link: GOV.UK SEISS5

The Government has published draft clauses for the next Finance Bill, which broadly cover pre-announced policy changes.

The government is committed, where possible, to publishing most tax legislation in draft for technical consultation before the relevant Finance Bill is laid before Parliament.

The consultation will close on 14 September 2021.

Internet link: GOV.UK Draft Finance Bill 2021-22

HMRC has recently launched a consultation on how basis periods can be reformed for income tax for the self-employed.

The consultation seeks to gather views on how best to implement a proposal to simplify the rules under which profits of an unincorporated trading business are allocated to tax years using basis periods. The consultation also includes suggestions regarding transitional rules for moving to the new system.

HMRC aims to simplify the system before Making Tax Digital (MTD) for income tax is implemented.

The proposals affect the self-employed and partnerships with trading income. It mainly affects unincorporated businesses that do not draw up annual accounts to 31 March or 5 April and those that are in the early years of trade.

HMRC stated that it would like to gather views on the matter from businesses, advisers, tax software providers and representative bodies.

Internet link: GOV.UK Basis period reform – consultation

HMRC has confirmed that almost 800,000 employees who have been working from home during the pandemic have already claimed tax relief on household related costs.

The saving is worth up to £125 per year for each employee, and eligible workers can claim the full year’s entitlement if they have been told to work from home by their employer, even if it has been for just one day during the tax year.

Employees who have either returned to working in an office since early April or are preparing for their return can still claim the working from home tax relief and benefit from the full year’s relief for 2021/22.

Employees can apply directly themselves and receive the full tax relief that is due. Once their application has been approved, their tax code will be automatically adjusted for the 2021/22 tax year, and they will receive the tax relief directly through their salary.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said:

‘More people are getting back to office working now, but it’s not too late to apply for tax relief on household expenses if they’ve been working from home during the pandemic.’

Check eligibility and apply online at www.gov.uk/tax-relief-for-employees/working-at-home.

Internet link: GOV.UK news

HMRC is reminding tax credit claimants that they have until 31 July 2021 to renew their claims.

According to HMRC, 440,000 claimants have yet to renew their claims. More than 2.5 million annual tax credits packs were posted to claimants between late April and early July 2021.

Claimants will have either received an ‘auto-renewal’ reminder or a ‘reply required’ notice. All ‘reply required’ claimants must renew their claims or contact HMRC to notify them of any change in circumstances ahead of the deadline to continue receiving tax credits payments.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said:

‘We know how important tax credits are to our customers, so we’ve made it quicker and easier to renew claims online. There’s no need to wait for the 31 July deadline – do it now by searching ‘tax credits’ on GOV.UK.’

To renew your tax credits claim visit www.gov.uk/renewing-your-tax-credits-claim.

Internet links: GOV.UK press release