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

bobbooo

Tammykitty said:

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.

This is yet another reason why the government should have chosen to use the median rather than the mean average yearly profit i.e. order the profits in size and take the middle value. This is an inherently fairer metric here, as unlike the mean it is not wildly skewed by extreme values such as very low partial first-year profits (or in your case low starting-up profits), and is no less straightforward to calculate or automate than the mean. The government's decision to use the mean average rather than the median profit is either down to incompetence, or an intentional choice in order to reduce their total payout.

RyanHello

Did mine today, think i'll just take it rather than going through the process of claiming to be honest. It'll help.

Dazed_and_C0nfused

bluenun said:

For those of you that are going to appeal, have you already applied for the grant or did you abort it when you saw the amount you would receive?

Based on your post on another thread you have no grounds to appeal.

How do you appeal?
Have you already completed the grant application?
I ask because I started self employment in January 2018 so only have 3 months income (very low as I started from scratch and bought most of my tools in that time) for that year and my first complete trading year of 2018/2019.
I did fill in my details on the HMRC site this morning and applied for the grant but it was greatly reduced due to the inclusion of the 3 months from 2018.

If you don't agree with the scheme rules it is your MP that you need to contact.  HMRC themselves cannot change the SEISS legislation.

perfect10nandb

My actual profit averaged over the 3 years was around £7k a year as I am only a small business. This was under my tax bracket obviously. I was awarded £1300? I then applied for the bounce back loan with my Starling business bank and got turned down almost immediately. I do have problems with my credit history but nothing really bad. At a loss know as I can't go back to work until July 😥

Bibbitybobbitybop

bobbooo said:

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.

I was severely ill and didn't work 5 months of one of the years. Tough lucky luck. Dem the rules. Still spread over the year, not 7 months. Can you imagine the absolute mayhem and minefield of your logic.

bobbooo

bluenun said:

For those of you that are going to appeal, have you already applied for the grant or did you abort it when you saw the amount you would receive?

I appealed after applying for the grant. That's what they advise during the application process, as I think (hope) they will send out the incorrect amount first then add any due amount after. Ignore anyone telling you that you have no grounds for appeal - different statements of the rules on gov.uk contradict themselves as I explained in my previous post, so this is grounds for appeal in itself. It takes a couple of minutes and you have nothing to lose, and potentially thousands of pounds that you should have got in the first place to gain.

bobbooo

Bibbitybobbitybop said:

bobbooo said:

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.

I was severely ill and didn't work 5 months of one of the years. Tough lucky luck. Dem the rules. Still spread over the year, not 7 months. Can you imagine the absolute mayhem and minefield of your logic.

Did you claim ESA due to inability to work?

Bibbitybobbitybop

No, I've never claimed a benefit in my life. It would never have even crossed my mind tbh!!!

bobbooo

Bibbitybobbitybop said:

No, I've never claimed a benefit in my life. It would never have even crossed my mind tbh!!!

Well that's exactly what it's there for, and would have at least partially offset your losses due to your inability to work during that time.

boingingian

My claim went through today (6 days for payment) but they don’t use Net Profits they use the figure you are taxed on. I have purchased a new vehicle 2 years ago and my accountant has put some depreciation or similar into Capital Allowances which is deducted from Net Profits. Therefore it’s not a reflection of my actual earnings but I appreciate it saved me some tax on 18/19 accounts so I shouldn’t complain