For self employed furlough do you need 50%+ traded income all 3 years, or the average of 3?

nannyto2

e.g. If you have:

year 1 - 100% traded income

year 2 - 100% traded income

year 3 - 0% traded income, 100% non-traded income (business remained open, but they fell ill, and they rented a spare room for emergency income)

average of the 3 is 50%+ traded income.

Would that be eligible? Asking for a relative.

sharpe106

why have they got 0% trading income this year?

Jeremy535897

You test 2018/19 first. If trading income is not at least 50% of total taxable income, you then test the average over the period 2016/17 to 2018/19. In your case the 50% test would be passed, but your example of zero trading income in 2018/19 begs the question as to whether you meet the other eligibility tests:

"You can claim if you’re a self-employed individual or a member of a partnership and all of the following apply:

• you traded in the tax year 2018 to 2019 and submitted your Self Assessment tax return on or before 23 April 2020 for that year
• you traded in the tax year 2019 to 2020
• you intend to continue to trade in the tax year 2020 to 2021
• you carry on a trade which has been adversely affected by coronavirus"

Grumpy_chap

Looks like they ceased working as self-employed, so will fail on the "traded - still trading - intend to continue trading" criteria.

nannyto2

sharpe106 said:

why have they got 0% trading income this year?

Illness.

[Deleted User]

nannyto2 said:

sharpe106 said:

why have they got 0% trading income this year?

Illness.

I think you might struggle with having the most recent year as £0 trading income, as that is not actually trading and so I do not think that it meets the criteria.

Grumpy_chap

What is the non-traded income in year 3?  Was there no non-traded income at all in year 2?

Are they back to traded income now 2019-20 and 2020-21?

nannyto2

Grumpy_chap said:

What is the non-traded income in year 3?  Was there no non-traded income at all in year 2?

Are they back to traded income now 2019-20 and 2020-21?

My guess is a few thousand K. It was from renting a spare room as they were on an NHS waiting list for many months trying to sort things out. They were attempting to work ('open for business') in 2019, they just turned over no profit. They are still on traded income as main source, it was just that 2019 due to illness things were different.

nannyto2

MadMattUK said:

nannyto2 said:

sharpe106 said:

why have they got 0% trading income this year?

Illness.

I think you might struggle with having the most recent year as £0 trading income, as that is not actually trading and so I do not think that it meets the criteria.

My thoughts too. They were still 'open for business' i.e. the business website was still open and running. They just were not taking on as much work so the profit after expenses was 0. I think the plan was to work that year, which is why they were still 'open', but the NHS waiting list ended up taking most of the year.

calcotti

I think the phrase £0 trading income may have been misleading. The more recent posts appear to mean £0 trading profit (self employed personal income) which isn’t the same thing. A business that makes a loss is still trading.

Jeremy535897

My 5 June post sets out the criteria.