SEISS - Average earnings & grant calculation - Appeal Success?

macman

I suspect that a lot of people who have been declined are confusing their 'self-employed income' with their 'trading profits'. As far as SEISS is concerned, it's the latter that matters.
 Given that a potential 3.5m people were eligible, the Treasury had to devise a system that could determine eligibility based on existing data already in the system via previous tax returns, and not start from scratch, or even require people to initiate a claim. This has enabled them to pay out over 2.5m claims in a relatively short space of time. Of course they could have built a more complex system that took into account some of the quirks that have arisen, but that would have added weeks to the roll-out, and time was of the essence here. Given that constraint, I think they deserve some credit for this (and I speak as someone who has lost out as a result of the 50% rule anyway). 

Grumpy_chap

While it may seem unfair to some that the three years are simply averaged and if you only started in the first year 2016-17, the system has to use data that is already captured.
Otherwise, there would be a system that if you started self-employment before 2016-17, then you are simply averaged over three years.  Others who started in 2016-17 would have to be asked how many months was self-employed and who wouldn't then simply say "Oh, I only started in March 2017"?

[Deleted User]

Ziatina said:

Help! My new accountant for 2018/19 tax return filed it without offsetting 3k car which would have put me under the 50k, therefore eligible. I realised that when HMRC told me I was not and checked my own tax return.
I asked HMRC to review my eligibility but the letter that came still said no. I looked and found out any amendment after 23/4 was not taken into consideration.
Surely they have to look again if it was a genuine mistake?! What do you suggest I do, I’m skint and missed out on SEISS thanks to my accountant! Crazy!

There is nothing you can do unfortunately, you do not meet the criteria for the scheme. They set it out the conditions quite clearly and when the announcement was made that should have been the point where you checked your tax return again (as you say you should have checked it before you submitted it the first time), you had over a month to do so. 
As to what you should do, you need to see if you are eligible for Jobseekers and Universal Credit, as well as mortgage holidays. With regard to the SEISS, you will get nowhere. 

Jeremy535897

JoeGans said:

I'm not long self-employed, so earnings are as follows ...

2018/2019 - £3,000
2017/2018 -£0
2016/2017 -£0

... As the previous two years where zero's, shouldn't they be ignored? Otherwise, they reduce my "average" from £3k down to £1k for assessment ... Thanks, JG

Do you mean you only started self employment in 2018/19? If so, they will only look at 2018/19 and your first grant (assuming all the other eligibility criteria are met) will be £600.

Grumpy_chap

Ziatina said:

Help! My new accountant for 2018/19 tax return filed it without offsetting 3k car which would have put me under the 50k, therefore eligible. I realised that when HMRC told me I was not and checked my own tax return.
I asked HMRC to review my eligibility but the letter that came still said no. I looked and found out any amendment after 23/4 was not taken into consideration.
Surely they have to look again if it was a genuine mistake?! What do you suggest I do, I’m skint and missed out on SEISS thanks to my accountant! Crazy!

You could try to claim against the Accountant's PI cover.
I suspect they will say you checked and approved the tax return before submission.  Did you?  If so, the PI cover won't be any help to you.
BUT, the eligibilty can take into account 3 years...

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’re not eligible based on the 2018 to 2019 Self Assessment tax return, we will then look at the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019.

devonconveyancer

Okay, can I have some advice please - I have had self employed status since 5.5.2005.  I had various periods of bona fide employment from 2010 through to 2018, but none of them for longer than 18 - 22 months, and never relinquished my self employed status, just declared NIL SE Income for those years (via my accountant.  Fast forward to 2016/17, I took up employment again 1.10.16 so several months of SE trading profit total £11,145.00.  2017/2018 Tax return declared NIL S/E income as was still employed.  around June 2018 I gave up employment and went back to SE, so some 9 months SE income £13,508 trading profit.  All the calculators I have used say £2,700 as the Regulations apparently say the Grant should only be based on 2018/19 Tax Return in these circumstances.  HMRC said NO!  SEISS calc based on all three tax returns and therefore gave £1,644.  I asked for a review and it took them four weeks to simply repeat their original calculations with absolutely no explanation as to why they had refused to accept the actual Regulation and apply it to my case - anyone know what I can do know or how I can move it forward.  I desperately need the additional monies as there is absolutely no chance of my little business recovering for a long time to come as there is no need for my services at present.  I am endeavouring to set up an alternative SE business but without some cashflow to help it is so difficult :-(

jjames1985

devonconveyancer said:

Okay, can I have some advice please - I have had self employed status since 5.5.2005.  I had various periods of bona fide employment from 2010 through to 2018, but none of them for longer than 18 - 22 months, and never relinquished my self employed status, just declared NIL SE Income for those years (via my accountant.  Fast forward to 2016/17, I took up employment again 1.10.16 so several months of SE trading profit total £11,145.00.  2017/2018 Tax return declared NIL S/E income as was still employed.  around June 2018 I gave up employment and went back to SE, so some 9 months SE income £13,508 trading profit.  All the calculators I have used say £2,700 as the Regulations apparently say the Grant should only be based on 2018/19 Tax Return in these circumstances.  HMRC said NO!  SEISS calc based on all three tax returns and therefore gave £1,644.  I asked for a review and it took them four weeks to simply repeat their original calculations with absolutely no explanation as to why they had refused to accept the actual Regulation and apply it to my case - anyone know what I can do know or how I can move it forward.  I desperately need the additional monies as there is absolutely no chance of my little business recovering for a long time to come as there is no need for my services at present.  I am endeavouring to set up an alternative SE business but without some cashflow to help it is so difficult :-(

HMRC are right.  You could try for a bounceback loan and UC if you're really struggling with household bills.

Grumpy_chap

Plus tax deferrals.  Mortgage / loan payment holidays.

Jeremy535897

devonconveyancer said:

Okay, can I have some advice please - I have had self employed status since 5.5.2005.  I had various periods of bona fide employment from 2010 through to 2018, but none of them for longer than 18 - 22 months, and never relinquished my self employed status, just declared NIL SE Income for those years (via my accountant.  Fast forward to 2016/17, I took up employment again 1.10.16 so several months of SE trading profit total £11,145.00.  2017/2018 Tax return declared NIL S/E income as was still employed.  around June 2018 I gave up employment and went back to SE, so some 9 months SE income £13,508 trading profit.  All the calculators I have used say £2,700 as the Regulations apparently say the Grant should only be based on 2018/19 Tax Return in these circumstances.  HMRC said NO!  SEISS calc based on all three tax returns and therefore gave £1,644.  I asked for a review and it took them four weeks to simply repeat their original calculations with absolutely no explanation as to why they had refused to accept the actual Regulation and apply it to my case - anyone know what I can do know or how I can move it forward.  I desperately need the additional monies as there is absolutely no chance of my little business recovering for a long time to come as there is no need for my services at present.  I am endeavouring to set up an alternative SE business but without some cashflow to help it is so difficult :-(

Did your 2016/17 return state a date you ceased your self employment? Did your 2018/19 return state a date you started self employment? Did you complete a SA103S for 2017/18? HMRC have treated you as trading throughout, albeit presumably with nil turnover and expenses in 2017/18, presumably because you never stated your self employment ceased.

devonconveyancer

jjames1985 said:

devonconveyancer said:

Okay, can I have some advice please - I have had self employed status since 5.5.2005.  I had various periods of bona fide employment from 2010 through to 2018, but none of them for longer than 18 - 22 months, and never relinquished my self employed status, just declared NIL SE Income for those years (via my accountant.  Fast forward to 2016/17, I took up employment again 1.10.16 so several months of SE trading profit total £11,145.00.  2017/2018 Tax return declared NIL S/E income as was still employed.  around June 2018 I gave up employment and went back to SE, so some 9 months SE income £13,508 trading profit.  All the calculators I have used say £2,700 as the Regulations apparently say the Grant should only be based on 2018/19 Tax Return in these circumstances.  HMRC said NO!  SEISS calc based on all three tax returns and therefore gave £1,644.  I asked for a review and it took them four weeks to simply repeat their original calculations with absolutely no explanation as to why they had refused to accept the actual Regulation and apply it to my case - anyone know what I can do know or how I can move it forward.  I desperately need the additional monies as there is absolutely no chance of my little business recovering for a long time to come as there is no need for my services at present.  I am endeavouring to set up an alternative SE business but without some cashflow to help it is so difficult :-(

HMRC are right.  You could try for a bounceback loan and UC if you're really struggling with household bills.

I would actually like an explanation as to WHY they are right?   HMRC's guidance at https://www.gov.uk/guidance/how-hmrc-works-out-total-income-and-trading-profits-for-the-self-employment-income-support-scheme#threeyears and particularly the chart headed up "If you did not trade in the tax year 2017 to 2018" support my view, and the calculators provided by a variety of accountants online all support my view so far.  No one will explain to me precisely why the three years' rule should be used when the above link says it should not!  I did not trade in 2017/2018 - it is clear from the my Tax records I was a full time employee!