For those who are self-employed...

[Fletch]

Grants shouldn't be taken into consideration mate. It's your operating turnover and/or profit they will look at.

Don’t you show the grants though as part of your income mate when do your tax return , so it’s included in your profit ? It is taxed as normal income is
I’ve included it as income as her pension provision is crap and I’m trying to pay lot more in over next few year , can only pay in (including govt tax relief ) as much as your profit , not sure if I’ve ballsed up now

 

[sketchy]

Don’t you show the grants though as part of your income mate when do your tax return , so it’s included in your profit ? It is taxed as normal income is
I’ve included it as income as her pension provision is crap and I’m trying to pay lot more in over next few year , can only pay in (including govt tax relief ) as much as your profit , not sure if I’ve ballsed up now

I think I read somewhere on next tax return a new section is included to put down grants in. It is still taxed but they are keeping it separate I'd assume as a way of easily checking through people who shouldn't have claimed if profits are up.

 

[Fletch]

for any self employed making pension contributions, looks like the grant DOES count towards what you can pay into a SIPP

SEISS grants and pension contributions

Not going to pretend I am an accountant although I really enjoy reading this site. I am a self employed sole trader handyman, getting closer to retireme

www.accountingweb.co.uk

 

[the dark one]

Don’t you show the grants though as part of your income mate when do your tax return , so it’s included in your profit ? It is taxed as normal income is
I’ve included it as income as her pension provision is crap and I’m trying to pay lot more in over next few year , can only pay in (including govt tax relief ) as much as your profit , not sure if I’ve ballsed up now

I've read somewhere on gov. UK that the grants shouldn't be included when you decide whether your profits will be significantly down.

 

[Wild Card]

Don’t you show the grants though as part of your income mate when do your tax return , so it’s included in your profit ? It is taxed as normal income is
I’ve included it as income as her pension provision is crap and I’m trying to pay lot more in over next few year , can only pay in (including govt tax relief ) as much as your profit , not sure if I’ve ballsed up now

It's taxable as income yes, but not VATable.

If you or anyone is on here is close to the vat threshold, it cannot push you into it (even if it does take your overall income into it)

I would put it as other trading income and make sure it's not doing anything it shouldn't on your return.

decent article here from the ciot.

Self-employment Income Support Scheme | Chartered Institute of Taxation

Our latest webinar about the Self-Employment Income Support Scheme (SEISS) took place on Monday 19 April 2021.

www.tax.org.uk

 

[sketchy]

It's taxable as income yes, but not VATable.

If you or anyone is on here is close to the vat threshold, it cannot push you into it (even if it does take your overall income into it)

I would put it as other trading income and make sure it's not doing anything it shouldn't on your return.

decent article here from the ciot.

Self-employment Income Support Scheme | Chartered Institute of Taxation

Our latest webinar about the Self-Employment Income Support Scheme (SEISS) took place on Monday 19 April 2021.

www.tax.org.uk

I'm confused by basis period bit. When declaring profit is down is it for the whole tax year 20/21 or just looking at Feb, march, April?

 

[Wild Card]

I'm confused by basis period bit. When declaring profit is down is it for the whole tax year 20/21 or just looking at Feb, march, April?

What is your accounting period? they are usually the same, unless you are a new sole trader/partnership etc?

 

[Jap Stammer]

Daft question - I normally fill in my wife's Self-assessment for for her.

Does the latest grant (due today, I think) go on last years return - 2020-2021 - or on next year's?

I know it covers February, March and April 2021 but because she isn't receiving it until 2021-2022's tax year I'm not sure where it should be included.

 

[Wild Card]

I'm confused by basis period bit. When declaring profit is down is it for the whole tax year 20/21 or just looking at Feb, march, April?

I have just read it, do you mean the bit where is asks you if you have 2 basis periods between February to April 21? It isnt the easiest to understand, I think it means that where you have two accounting period that are between February and April 21, this usually happens if you are a new trader and you started trading at say, 1st feb 2021. your first accounting period would always be to 6th april 2021. then the second year your accouting period could be the first 12 months of trading, so 1st Feb 21 to 31 January 22. so there would be some overlap.

Im not sure if it is the same thing in this context.

 

[sketchy]

I have just read it, do you mean the bit where is asks you if you have 2 basis periods between February to April 21? It isnt the easiest to understand, I think it means that where you have two accounting period that are between February and April 21, this usually happens if you are a new trader and you started trading at say, 1st feb 2021. your first accounting period would always be to 6th april 2021. then the second year your accouting period could be the first 12 months of trading, so 1st Feb 21 to 31 January 22. so there would be some overlap.

Im not sure if it is the same thing in this context.

Yeah thats the bit that confused me. I am a sole trader and been trading for 10 years or so. My accounting period is regular tax year. In my case what do I judge drop in profits on, the tax year compared to previous tax years or the 3 months of the grant to previous same months?

 

[Wild Card]

Daft question - I normally fill in my wife's Self-assessment for for her.

Does the latest grant (due today, I think) go on last years return - 2020-2021 - or on next year's?

I know it covers February, March and April 2021 but because she isn't receiving it until 2021-2022's tax year I'm not sure where it should be included.

i think ( i would double check on this) you count the whole grant as being received on the day you receive it, even though it might be for the past 3 months.

what makes me say this it that the finance act 2020 schedule 16 said that the may 2020 payment ( which included April, March and February 2020 grants) was to the taxed in the 2020/2021 tax year in full and not partially 2019/20 tax year.

here is the extract: section 3(3)

3(1)An amount of a coronavirus support payment made under an employment-related scheme—

(a)is referable to the business of the person entitled to the payment as an employer (even if the person is not for other purposes the employer of the employees to whom the payment relates), and

(b)is not referable to any other business (and no deduction for any expenses in respect of the same employment costs which are the subject of the payment is allowed in calculating the profits of any other business or in calculating the liability of any other person to tax charged under section 242 or 349 of ITTOIA 2005 or section 188 or 280 of CTA 2009 (post-cessation receipts)).

(2)A coronavirus support payment made under the self-employment income support scheme is referable to the business of the individual to whom the payment relates.

(3)Where an amount of a coronavirus support payment made under the self-employment income support scheme is brought into account under paragraph 1(2), the whole of the amount is to be treated as a receipt of a revenue nature of the tax year 2020-21 (irrespective of its treatment for accounting purposes).

Yeah thats the bit that confused me. I am a sole trader and been trading for 10 years or so. My accounting period is regular tax year. In my case what do I judge drop in profits on, the tax year compared to previous tax years or the 3 months of the grant to previous same months?

To qualify HM Revenue & Customs will look at your 2019/20 tax return.

The criteria is:-

- Trading profits must be £50,000 or less and,

- At least equal to your non trading income (this is what excluded you from the previous 3 grant instalments) and,

- You must have traded in 2019/20 and continue or intent to continue to trade in 2020/21 and,

- You must reasonably believe that your trading income has been and continues to be, compromised by the coronavirus outbreak.

I personally wouldnt get bogged down by that basis period comment if you have been trading for 10+ years, just look at your 2019/20 profits and if you can honestly say the above applies i would apply.

 

[Jap Stammer]

i think ( i would double check on this) you count the whole grant as being received on the day you receive it, even though it might be for the past 3 months.

what makes me say this it that the finance act 2020 schedule 16 said that the may 2020 payment ( which included April, March and February 2020 grants) was to the taxed in the 2020/2021 tax year in full and not partially 2019/20 tax year.

here is the extract: section 3(3)

3(1)An amount of a coronavirus support payment made under an employment-related scheme—

(a)is referable to the business of the person entitled to the payment as an employer (even if the person is not for other purposes the employer of the employees to whom the payment relates), and

(b)is not referable to any other business (and no deduction for any expenses in respect of the same employment costs which are the subject of the payment is allowed in calculating the profits of any other business or in calculating the liability of any other person to tax charged under section 242 or 349 of ITTOIA 2005 or section 188 or 280 of CTA 2009 (post-cessation receipts)).

(2)A coronavirus support payment made under the self-employment income support scheme is referable to the business of the individual to whom the payment relates.

(3)Where an amount of a coronavirus support payment made under the self-employment income support scheme is brought into account under paragraph 1(2), the whole of the amount is to be treated as a receipt of a revenue nature of the tax year 2020-21 (irrespective of its treatment for accounting purposes).

Cheers.

Looks like this latest grant should only be declared next year on that basis.

Much appreciated.

 

[sketchy]

i think ( i would double check on this) you count the whole grant as being received on the day you receive it, even though it might be for the past 3 months.

what makes me say this it that the finance act 2020 schedule 16 said that the may 2020 payment ( which included April, March and February 2020 grants) was to the taxed in the 2020/2021 tax year in full and not partially 2019/20 tax year.

here is the extract: section 3(3)

3(1)An amount of a coronavirus support payment made under an employment-related scheme—

(a)is referable to the business of the person entitled to the payment as an employer (even if the person is not for other purposes the employer of the employees to whom the payment relates), and

(b)is not referable to any other business (and no deduction for any expenses in respect of the same employment costs which are the subject of the payment is allowed in calculating the profits of any other business or in calculating the liability of any other person to tax charged under section 242 or 349 of ITTOIA 2005 or section 188 or 280 of CTA 2009 (post-cessation receipts)).

(2)A coronavirus support payment made under the self-employment income support scheme is referable to the business of the individual to whom the payment relates.

(3)Where an amount of a coronavirus support payment made under the self-employment income support scheme is brought into account under paragraph 1(2), the whole of the amount is to be treated as a receipt of a revenue nature of the tax year 2020-21 (irrespective of its treatment for accounting purposes).


To qualify HM Revenue & Customs will look at your 2019/20 tax return.

The criteria is:-

- Trading profits must be £50,000 or less and,

- At least equal to your non trading income (this is what excluded you from the previous 3 grant instalments) and,

- You must have traded in 2019/20 and continue or intent to continue to trade in 2020/21 and,

- You must reasonably believe that your trading income has been and continues to be, compromised by the coronavirus outbreak.

I personally wouldnt get bogged down by that basis period comment if you have been trading for 10+ years, just look at your 2019/20 profits and if you can honestly say the above applies i would apply.

Thanks for explaining that helps, I also found this on moneysavingexpert which confirms it is done on the 3 months of the grant. I am down by 2/3rds from previous feb, march and april of previous years.

"Your business must have had a new or continuing impact from coronavirus which you believe will cause a "significant reduction" in trading profits. You'll need to be able to make a declaration to this effect. In practice, to be able to make the declaration:

1) Your business must continue to be affected by Covid in the claim period, or be newly affected in this time. Your business must be facing an ongoing hit from coronavirus from beginning of February to 30 April, or be newly affected in this period. So you cannot apply if your business was struggling in, say, August, September and October, but is now no longer affected. You also cannot apply if the only impact was increased costs."

 

[Fletch]

@Jap Stammer the new grant would def go into next years tax return as you actually receive the grant in 21/22 tax year

my understanding is you compare Feb- April only to prior years Feb-April (unsure how far you can go back ?) and if turnover down then can likely claim ? I think

 

[Jap Stammer]

@Jap Stammer the new grant would def go into next years tax return as you actually receive the grant in 21/22 tax year

my understanding is you compare Feb- April only to prior years Feb-April (unsure how far you can go back ?) and if turnover down then can likely claim ? I think

Cheers.

 

[the dark one]

@Jap Stammer the new grant would def go into next years tax return as you actually receive the grant in 21/22 tax year

my understanding is you compare Feb- April only to prior years Feb-April (unsure how far you can go back ?) and if turnover down then can likely claim ? I think

Problem with that is no one earned fuck all last year mid march all of April., so even if you're still struggling, income is likely to still be better this year than last Feb, March and April. Surely it means if your profit for the tax year is significantly lower, AND you're still struggling with lower demand due to Covid.

 

[Wild Card]

Problem with that is no one earned fuck all last year mid march all of April., so even if you're still struggling, income is likely to still be better this year than last Feb, March and April. Surely it means if your profit for the tax year is significantly lower, AND you're still struggling with lower demand due to Covid.

Pretty sure the eligibility is based on the profits from your 2019/20 tax return, plus the following,

Trading profits must be £50,000 or less and,
-At least equal to your non trading income (this is what excluded you from the previous 3 grant instalments) and,
-You must have traded in 2019/20 and continue or intent to continue to trade in 2020/21 and,
-You must reasonably believe that your trading income has been and continues to be, compromised by the coronavirus outbreak.

All this is from the HMRC website, unless the government particulars say different I would work on this.

[Withdrawn] Check if you can claim a grant through the Self-Employment Income Support Scheme

If you're self-employed or a member of a partnership and have been impacted by coronavirus (COVID-19) find out if you can use this scheme to claim a grant.

www.gov.uk

Plus what fletch said about the 3 months.

 

[Fletch]

Problem with that is no one earned fuck all last year mid march all of April., so even if you're still struggling, income is likely to still be better this year than last Feb, March and April. Surely it means if your profit for the tax year is significantly lower, AND you're still struggling with lower demand due to Covid.

Prob compare it to Feb-April 2019? As loads will have been earning little in 2020 when lockdown started ? That would be my take anyway , and just keep a working paper “incase” . I agree though it should be much clearer

 

[Wild Card]

I think what it is saying is, is your February to April 21 income impacted by covid.

If yes or you have reason to believe it is, then HMRC will look to your 2019/20 tax return to see if you fit the additional criteria. The 50k and not earning more from other sources etc.

Assuming your tax return checks out, you get the grant.

 

[sketchy]

Prob compare it to Feb-April 2019? As loads will have been earning little in 2020 when lockdown started ? That would be my take anyway , and just keep a working paper “incase” . I agree though it should be much clearer

I've compared mine to the 3 months of the 3 years HMRC used to work out amount of grant for previous ones as well as including last years.

Martin Lewis saying demand or profits has to be down in the months of the grant rather than previous months so only way I can see to properly measure that is by comparing months.

'I'm self-employed but confused about whether I can claim the fifth grant' – Unsure? Here's what you need to know

100s of self-employed people are confused about what constitutes being “adversely affected” by coronavirus, we have some helpful scenarios to work out where you stand, as well as HMRC’s guidance.

www.moneysavingexpert.com