SELF-EMPLOYMENT GRANT LOWER THAN PROMISED 80% OF PROFITS? Please share your experiences here

_tonybroke_

many thanks Dazed_and_C0nfused for the link very helpful
im claiming "on the phone" via the internet so wanted to know if there was anything i needed to save me scrolling around whilst making the claim.
thanks again,

jadex

rsspence said:

Same issue for my wife, just £462 profit for 16/17. approx. £12k for the next two years, so a good deal of money less than we thought. I know it is hard to set up and as with everything there are winners and losers, but it would be nice to have this assessed on a true reflection of loss due to covid19. We have made a claim, lets see what happens.

Similar story.
Just one month of trading in 2016/17 tax year. Only £501 counted as a whole year profit. Effectively 2 years profit (well 25 months to be precise)  averaged over 3 years resulted in grant being lower than anticipated at the time of scheme announcement (after that, when details become available it was obvious HMRC would average over 36 months rather than 25 months).

DaveJBlackburn

Same story, just two months of trading in 2016/2017 skewing the monies by a substantial amount.  I raised a complaint immediately via the online tool. Has anyone else done likewise and has anyone else had a response as yet on this from HMRC? Will then pro-rata it. I can understand if you didnt declare your business start date on your return, but i clearly did, so i didn't expect this to happen this way.

deno2000

Same story, just two months of trading in 2017/2018. so not / by 14 months it was / by 24. resulting in about 1.5-2k less than "should" of been

bobbooo

DaveJBlackburn said:

Same story, just two months of trading in 2016/2017 skewing the monies by a substantial amount.  I raised a complaint immediately via the online tool. Has anyone else done likewise and has anyone else had a response as yet on this from HMRC? Will then pro-rata it. I can understand if you didnt declare your business start date on your return, but i clearly did, so i didn't expect this to happen this way.

Yes, I submitted an appeal immediately. I suggest anyone who has been unfairly disadvantaged by this flaw in the scheme and recorded their start date on their partial first-year tax return do the same. HMRC have no excuse not to adjust the grant by e.g. averaging only over full years in these cases. Otherwise they are not providing "a taxable grant of 80% of your average monthly trading profits" as clearly stated on gov.uk.

Bibbitybobbitybop

The rules have been applied properly so no appeal will succeed. 

luke100787

I'm about 2k down because of this but they made it clear from the start this was the way it would work so no grounds for appeal 

Tammykitty

Even business with a start date pre April 16 have been affected by the averaging. Profits in 18/19 of about £17k, and £20k in 19/20, and about £14k in 16/17 but only £2k in 16/17 as still in start up phase means only £700 a month, despite current earning being £1800 a month. 
The £2k grant doesn't even cover the bills of the business still outstanding when lockdown commenced.
It should be the higher of 18/19 or the average of 3 years.
The Furlough scheme for people with variable earnings uses a higher of formula.

LINE999

Applied today as did my friend! I’ve been trading 6 years and my friend just one.
My friend got around 300.00 less than me as they only used the one year - because of building my business 2 of the returns were low and the last year was a lot higher!  Seems unfair to me 🙄

bobbooo

Bibbitybobbitybop said:

The rules have been applied properly so no appeal will succeed. 

The rules of the calculation directly contradict the rules on the main SEISS page I linked to above, which as I said, states "the scheme will allow you to claim a taxable grant of 80% of your average monthly trading profits." What many people like those on this thread are receiving can either be described as 80% of their average yearly (not monthly) trading profits (over the last three years), or less than 80% (some much less, even as low as 40%) of their average monthly trading profits. Neither of these match the description of the scheme by the government above which is clearly stated on gov.uk. This is strong grounds for appeal. If this appeal is rejected, I will lodge a complaint with HMRC, and if necessary escalate the complaint to an HMRC adjudicator. I suggest everyone does the same, as well as spreading this issue on social and mainstream media in order to put pressure on the government to act to fix this flaw in the system and stop unfairly disadvantaging many people who just happened to start their business partway through the tax year.