Help/advice needed regarding SEISS grant 2

nathandelabrum_2

Hopefully I’m posting about this in the correct place, apologies if not.

I posted a couple of months ago regarding this, but I’m still not sure. Even after reading the numerous scenarios listed by Martin in his article, I’m still not sure if I can claim the second grant.

I run a window cleaning business and I took 6-7 weeks off at the start of the pandemic, so I obviously claimed the first grant. I used most of the grant in upgrading my equipment and getting another van on the road. As such, I’m expecting my turnover to potentially be 50% higher than last year, especially knowing I have to declare the first grant on my return.

As of now, we’ve got about 5 residential customers that we’re still not cleaning due to either shielding or they’ve lost their job and are hard up (due to Covid). We’ve got a couple of businesses on the books (tiny restaurants where social distancing is impossible) that still aren’t open, so I’m not cleaning them either. Overall, it probably amounts to £50-£80 a week that I’m losing out on.

This is where I’m unsure what to do. Turnover is going to be bigger than ever; upgrading my equipment and getting another van on the road has made a big difference. But I still would technically be making even more if it wasn’t for Covid. So should I claim the second grant?

The other point I’m not sure on is keeping records if HMRC did ever get nosey. I keep pretty good records, but the nature of my business would make it relatively hard to ‘prove’ that we’re not cleaning for certain customers. I have an electronic record and a paper record of who has paid, who we cleaned for on a given day etc, but it’s obviously just me entering that data. I’m concerned that HMRC would say that it’s not enough proof for me simply to say ‘oh I didn’t clean their windows for 8 months’. 

Hopefully this makes sense and any guidance at all would be most appreciated!

Illusionary

Would I be correct to understand that your overall capacity has now increased, so that while you have a handful of customers who you're not servicing, overall your level of business post-14 July has increased? If so, I don't think that you would qualify for the second grant. After all, expecting a certain level of customer loss would be normal for most businesses under normal circumstances.

nathandelabrum_2

That is kind of correct yes. The number of customers I have is probably marginally higher since July 14th. The main reason turnover is going to be higher is because instead of cleaning for customers every 4-5 weeks, we’re now cleaning every 3-4 weeks due to better equipment and having another vehicle. 

I also don’t know if it’s worth claiming grant 2 because of the amount of tax they’ll take from it. My profit will be getting really close to putting me into the higher rate bracket if I claim this one. Long term, I estimate I’d probably only keep maybe a quarter of it anyway.

Illusionary

Okay - so yes, based on that additional detail, I'd be fairly confident in saying that you wouldn't be eligible for the second grant. Do, though, monitor how things go for the next few months - if things haven't worked out as expected by October, you could potentially reconsider.

Jeremy535897

The rules say your business has to be adversely affected by coronavirus after 13 July 2020. You have existing customers that would come back but for coronavirus. Your business is adversely affected. The fact that you have managed to build other business elsewhere is irrelevant.

There was an example recently of someone who set up in business as a courier as his entertainment income had fallen. He was worried he might make more than he would have done as an entertainer, so could he claim the grant? Of course he could. It's like saying you couldn't get a job in a supermarket in case you did better. The government does not want people turning away work for fear of losing a grant. Just make a note of the customers and figures concerned.

Your argument that you are not that bothered as you might only keep a quarter of the grant after tax makes no sense. Firstly, your tax and NIC rate is unlikely to exceed 42%. Secondly, the same argument would apply to getting new business. A receipt from a customer boosts profit like the grant does.

poppy12345

I would say you're not adversely affected because you've taken on more work. You have more vehicles doing more work so how can that be adversely affected?

Illusionary

Jeremy535897 said:

The rules say your business has to be adversely affected by coronavirus after 13 July 2020. You have existing customers that would come back but for coronavirus. Your business is adversely affected. The fact that you have managed to build other business elsewhere is irrelevant.

There was an example recently of someone who set up in business as a courier as his entertainment income had fallen. He was worried he might make more than he would have done as an entertainer, so could he claim the grant? Of course he could. It's like saying you couldn't get a job in a supermarket in case you did better. The government does not want people turning away work for fear of losing a grant. Just make a note of the customers and figures concerned.

Your argument that you are not that bothered as you might only keep a quarter of the grant after tax makes no sense. Firstly, your tax and NIC rate is unlikely to exceed 42%. Secondly, the same argument would apply to getting new business. A receipt from a customer boosts profit like the grant does.

The circumstances here differ from the other examples that you mention, as those consider replacement business activity from a separate trade, whereas here the customers are for the same trade. While the HMRC examples still aren't as helpful as they could be, I stand by my view that the circumstances here wouldn't qualify for the second grant.

Jeremy535897

 The circumstances here differ from the other examples that you mention, as those consider replacement business activity from a separate trade, whereas here the customers are for the same trade. While the HMRC examples still aren't as helpful as they could be, I stand by my view that the circumstances here wouldn't qualify for the second grant.

I understand why you reach this conclusion, but you must admit there is no logic to it. Someone could win the National Lottery and still qualify for the grant. I think the problem is with the examples, that seem to emphasise the need for an overall reduction in income, rather than a specific reduction in income. The examples are not law. The law simply requires an adverse effect. Losing loyal repeat customers due to coronavirus is to me an adverse effect, no matter whether you make it up elsewhere or not.

justwhat

You are adversely effected. You have regular clients that are not open due to covid. You have lost that business .  Just because you are working 24/7 , noon night and day . Or implemented some other action that mitigated the lost business , does not mean you are not adversely effected.
Claim it and keep a note of the negative / adverse effect on your business.
The grant is not based on profit alone it is based on being adversely effected. 

nathandelabrum_2

Thanks for all the input guys. The differences in opinion are really interesting - they pretty much sum up how I’m thinking. One day I’m settled in my mind that I’m going to claim, the next day I’ve changed my mind.

I’ve registered for one HMRC’s webinars regarding the grant. Has anyone joined one of these or does anyone know of someone who has? Wondering if they’re helpful or just a waste of time. 

If I’m still unsure come the 17th, I think I’m going to hold off and see what happens. There’s no hurry, I have 2 months to claim. If my area goes into lockdown or if myself or a family members is infected, then I’d have a much stronger case for claiming it.

Jeremy535897

justwhat said:

You are adversely effected. You have regular clients that are not open due to covid. You have lost that business .  Just because you are working 24/7 , noon night and day . Or implemented some other action that mitigated the lost business , does not mean you are not adversely effected.
Claim it and keep a note of the negative / adverse effect on your business.
The grant is not based on profit alone it is based on being adversely effected. 

Glad to see someone agrees with me! There is a danger of overthinking this. Think of the following possibilities:

• your turnover has fallen, and continues to be reduced, because 2 customers can't use you due to coronavirus, but not by as much as you got from SEISS 1, so actually your income goes up. On the analysis of the other posters, this would preclude you from claiming SEISS 2, which is nonsensical
• last year you took 3 months off, so this year, despite having lost 5 customers due to coronavirus, your turnover has gone up compared with last year. Your business has clearly been adversely affected by coronavirus
• last year your business was growing so you took on a new employee. Business doubled before coronavirus hit, when it reduced substantially, but still not below last year's turnover. That is similar to the case in point here. Of course your business has been adversely affected by coronavirus

Morally, you might decide not to claim if you are better off than last year (but not by as much as you should be), but that is your choice. It cannot be government policy to push people into turning away work to get a grant, but that is what is suggested by other posters. I may be wrong, but I don't think HMRC are going to investigate everyone whose profit goes up over the pandemic. I think they will look at industries that should not have suffered. If I were a PPE wholesaler and claimed SEISS, questions would rightly be asked.