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

boingingian

perfect10nandb said:

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 😥

There’s a post I’m in relating to Bounce Back Loans being declined if you could comment on that as it’s be interesting to see how many of us have been declined too

MrsJoJo

My OH has been affected by this. He had always been employed but was offered the opportunity to do some work in 2016/17 on a self employed basis. He continued to be employed full time but also registered as self employed to declare the additional income. His self employment earnings in 2016/17 and 2017/18 were minimal, way below the 50%. He went solely self employed part way through 2018/19 and his self employment income during that year was over the 50%. For this reason we expected the calculation to be based solely on his 2018/19 profits. I get that there will be winners and losers but it seems a poorly thought out scheme.

Jeremy535897

To get a scheme that potentially affects 5 million people up and running in under 2 months is amazing, not "poorly thought out".

Rebeccat90

Similar situation for me - FT self-employed from April 2018 to date. Profit for 18/19 was 40k so was expecting (and needing) the maximum grant. For a few months in 2017 I did some ad hoc private tuition while I was a student, I wanted to be transparent and declare this (given my current profession) so I submitted tax return for £700 for 2016/17 and £200 for 2017/18. I also received non-taxable income/grants as well as employed income during this time. SEISS has now been calculated across the 3 years rather than the 1 year when I have been fully SE in 2018/19. What are thoughts on grounds of appeal on the basis of very minimal income for preceding tax years, especially given that the £1,000 trading allowance does not even need to be declared post Apr 2017, so had I (legally) not declared this income I would have been entitled to around £2.5k more than I currently am entitled to, although I appreciate this may only apply to the 2017/18 tax return. 

John_

bobbooo said:

I'll get this thread back on topic by sharing my experience. I started my business on the very last day of the 16/17 tax year. Obviously my profits were minimal for this one day, but have still been used in a three-year average calculation alongside full-year profits for the 17/18 and 18/19 tax years. This has resulted in my grant representing 53% of my actual average profits, which is not enough for my business to survive. The absurdity and arbitrary unfairness of this is clear when you consider that if I'd started trading one day later, I would be receiving the 80% of my profits that everyone should be getting and was originally promised by the government.

That’s not bad. Like millions of others, I’m still having to work for my wage.

You’ll need to use your savings, supplement them with this government money, and possibly also take a second job.

Yes, you may also have to tighten your belt for a while, but that’s to be expected under conditions like this.

Pete_1234

Same situation as others in a way. Grant is much lower than expected as a result of three year average being used instead of 18/19 tax return. During 16/17 and 17/18 I was part time employed/part time self-employed as I was setting up the business. Left employment and went full time self-employed in December 2017. My 18/19 return is therefore my first as fully self-employed, and is almost double the taxable self-employed profit as the two previous tax years. If 18/19 was used alone my grant would be a lot more, but perhaps more importantly would be much more representative of my current situation and current financial needs.

I do appreciate entirely that there are people a lot worse off than myself and who find themselves stuck between a rock and a hard place/slipping through the nets of various government support schemes. I do feel lucky. I don't think that invalidates mine or anyone elses greivances on this thread however - It is possible to feel relief to be getting something and at the same time let down by the way it has been calculated. I will be appealing although with little to no expectation of it making a difference.

bobbooo

John_ said:

bobbooo said:

I'll get this thread back on topic by sharing my experience. I started my business on the very last day of the 16/17 tax year. Obviously my profits were minimal for this one day, but have still been used in a three-year average calculation alongside full-year profits for the 17/18 and 18/19 tax years. This has resulted in my grant representing 53% of my actual average profits, which is not enough for my business to survive. The absurdity and arbitrary unfairness of this is clear when you consider that if I'd started trading one day later, I would be receiving the 80% of my profits that everyone should be getting and was originally promised by the government.

That’s not bad. Like millions of others, I’m still having to work for my wage.

You’ll need to use your savings, supplement them with this government money, and possibly also take a second job.

Yes, you may also have to tighten your belt for a while, but that’s to be expected under conditions like this.

I'm also working, harder than ever, yet receiving practically no income, just like many self-employed right now. The only group who isn't having to work are non-essential workers on furlough, but I don't begrudge them that at all, because they have no choice. This isn't a case of just 'tightening your belt for a while', this is many businesses completely going under and never recovering again (which will be bad for the wider economy in the long term), all due to an easily solvable flaw in the SEISS calculation that's resulted in a large number of people receiving nowhere near the 80% of their profits stated in the scheme. And no, we can't take second jobs, because If our businesses are to have any chance of survival at all we need to put all our free time into keeping them afloat.

bobbooo

An update on this issue. I've now received the (incorrect) amount in my bank account. I appealed straight after submitting the grant claim, so anyone worried an appeal would delay them receiving the grant need not worry. If you have been unfairly financially disadvantaged due to the flaw in the average monthly profit calculation described at the beginning of this thread, I urge you to appeal now. It takes a couple of minutes and you have nothing to lose, and money you should have got in the first place to gain, according to the HMRC's own description of the scheme published on gov.uk.