SEISS - Average earnings?

mcooke999

I've been self employed for around 7 years now but only been doing it full time for the last two years. Before that I was working full time in employment whilst doing my self employed business in the evenings and weekends to build it up...

My 18/19 & 19/20 turnovers are therefore based on full time self employment, however, the 16/17 tax return is basically only based on working around 1 day a week self employed... so doesn't add up to very much at all.

Will this reduce the amount of SEISS grant I can claim or will HMRC ignore it? Obviously I'm grateful for anything I can get at the moment but I'm wondering if they will ignore this year as it was so small or count it towards the average?

Jeremy535897

HMRC will include 2016/17 as well as the later two years to work out the average.

mcooke999

Thanks but I decided to check this with HMRC via their webchat service and they have said that any tax years where you earned less than 50% from self employed won't be counted towards the calcualtion...

Jeremy535897

Prepare to be disappointed when they pay you the grant, because this is not what the legislation or guidance says. The 50% rule is an eligibility test and has nothing to do with the computation of the grant itself.

mcooke999

That would mean that the advisor at HMRC is wrong then?

MarkJones4

mcooke999 said:

That would mean that the advisor at HMRC is wrong then?

You are correct. Any years where earnings from self employment were less than 50% or where you weren't trading get discarded. It is clearly stated in the examples on the Gov.uk website. So they will use your last 2 years for your calculation

mcooke999

Ok thanks. Now i'm 100% confused as I thought I'd double check with HMRC and this agent is saying it's just an average of all 3 years despite 16/17 being mostly PAYE??

Can anyone show me where it explains this rule online?

Vestraun

MarkJones4 said:

mcooke999 said:

That would mean that the advisor at HMRC is wrong then?

You are correct. Any years where earnings from self employment were less than 50% or where you weren't trading get discarded. It is clearly stated in the examples on the Gov.uk website. So they will use your last 2 years for your calculation

Where does it say that? 

mcooke999

I asked the HMRC agent that same question and after a while he said he couldn't find it online but assured me he had guidance notes saying that any year less than 50% would be ignored in the calculation...

mcooke999

This is what the second HMRC agent has said:

To work out your eligibility we will first look at your 2018 to 2019 Self Assessment tax return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income.
If you are not eligible based on your 2018 to 2019 Self Assessment tax return, we will look at the tax years 2016 to 2017, 2017 to 2018 and 2018 to 2019. There is more information on the GOV.UK website.

mcooke999

Again, confused?