The total amount receivable for the three month period 1 March to 31 May 2020 will be 80% of the relevant figure of “trading profit”, provided that the 80% figure does not exceed £7,500. The total amount receivable for the second three month period 1 June to 31 August 2020 will be 70% of the relevant figure of “trading profit”, provided that the 70% figure does not exceed £6,570.
We have set out some worked examples below. In each case, it is assumed that you have no income other than as stated in the examples, and that you have been trading in, and have profits accruing for, the three most recent tax years. If you do not have three years of profits, calculations will instead need to be based on the alternative basis outlined in the above page as to “trade profit”.
The following examples are not in any way exhaustive. They are meant only as illustrations, and they cannot serve as guidance for any case. They are all examples of operation of SEISS during the first three month period, and they show the amount of the grant payable for that period only. To use the same examples to show the amount of grant payable for the second three month period, you will need to replace figures as necessary in each case to take account of the reduction of "80%" to "70%" and "£7,500" to "£6,570" for the second three month period.
You should seek advice/clarification from HMRC and/or a professional adviser in all cases to work out whether you are eligible and what, if any, entitlement you have under SEISS.
Example A – Full claim
Trading profits: £18,000 (2016-17) + £25,000 (2017-18) + £35,000 (2018-19) =£78,000
Average profits per tax year: £78,000/3 = £26,000
Average profits per month of tax year: £26,000/12 = £2,167
Average profits for 3 months: £2,167 x 3 = £6,500
80% of that sum: £6,500 x 80% = £5,200
Since £5,200 is less than the maximum of £7,500, the trader will receive a total grant of £5,200.
Example B – Limited claim
Trading profits: £42,000 (2016-17) + £47,000 (2017-18) + £49,000 (2018-19) = £138,000
Average profits per tax year: £138,000/3 = £46,000
Average profits per month of tax year: £46,000/12 = £3,833
Average profits for 3 months: £3,833 x 3 = £11,500
80% of that sum: £11,500 x 80% = £9,200
Since £9,200 is more than the maximum of £7, 500, the trader will receive a total grant of only £7,500.
Example C – No claim
Trading profits: £52,000 (2016-17) + £49,000 (2017-18) + £51,000 (2018-19) = £152,000
Average profits per tax year: £152,000/3 = £50,666
Since the three year average of £50,666 and the 2018-9 figure of £51,000 are each more than the SEISS scheme cut off figure of £50,000, the trader is not eligible for any SEISS grant at all. Note that this goes further than merely limiting the trader’s claim to £7,500. It is actually a bar to any claim at all under SEISS.