Self-employed goal post move?

garystoessel

Yesterday's dot.gov self-employed update seemed to suggest ONLY 2018/19 profits would be used to calculate payments, other years "where needed", this seems at odds with previous communication that 3 years worth of profits would be used to calculate an average.

Anyone able to shed some light on the situation?

ProDave

I think they must have used 3 years for me.

in the last year, my rental income exceeded my SE income, so SE would be less than 50% of my income.  But when I checked yesterday it told me I was eligible which means it has correctly looked at the last 3 years where my SE income was nore than 50% of my income.

Other than that we will have to wait and see how the figures work out.

calcotti

garystoessel said:

Yesterday's dot.gov self-employed update seemed to suggest ONLY 2018/19 profits would be used to calculate payments, other years "where needed", this seems at odds with previous communication that 3 years worth of profits would be used to calculate an average.

Anyone able to shed some light on the situation?

Not clear what update you are referring to. I can only find these:

https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme#howmuch

You’ll get a taxable grant based on your average trading profit over the 3 tax years:

• 2016 to 2017

• 2017 to 2018

• 2018 to 2019

We will work out your average trading profit by adding together your total trading profits or losses for the 3 tax years, then we will divide by 3.
The grant will be 80% of your average monthly trading profits, paid out in a single instalment covering 3 months, and capped at £7,500 altogether. The online service will tell you how we’ve worked the grant out.

https://www.gov.uk/guidance/how-hmrc-works-out-total-income-and-trading-profits-for-the-self-employment-income-support-scheme

If you have traded for all 3 tax years
To work out your average trading profit we add together all profits and losses for all 3 tax years that you’ve had continuous trade, then divide by 3.

Clear from both these that it will be based on all three years (assuming trading in all three)

Jeremy535897

It's a misconception caused by the statement that they would look at 2018/19, and only look at earlier years if they had to, in one of the press releases. This of course refers to meeting the £50,000 and 50% tests, and has nothing to do with the calculation of the grant itself.