SEISS 3 "significant reduction in your trading profits"

Grumpy_chap

dg121 said:

if previous SEISS grant amounts count towards trading profits?

Yes, they do.

dg121

So SEISS counts towards trading profits, but you previous years are merely a small guide rather than the comparison. So it becomes a case of mostly comparing what you think you might have earned this year vs what you actually did with SEISS included pretty much?

Am I understanding that correctly?

It's good and reassuring that HMRC are not looking to trip people up and work with us. It makes sense that they target the more obvious and serious fraud cases.

Grumpy_chap

dg121 said:

So SEISS counts towards trading profits, but you previous years are merely a small guide rather than the comparison. So it becomes a case of mostly comparing what you think you might have earned this year vs what you actually did with SEISS included pretty much?

Am I understanding that correctly?

Yes.

Past years are only a guide and you need to assess SEISS eligibility against what profits would have been made this year without coronavirus.   However, if past profits are always fluctuating in a small band and you assess against this year "would have" at a much higher profits, then you need the business plan to back up the change.

Jeremy535897

There are 2 steps for those who continued to trade:
Will you suffer a reduction in activity, demand or capacity in the period 1 November 2020 to 21 January 2021? If yes
Will this reduction be significant in the context of what your overall trading profits (presumably including grants) should have been for the current year?

hunnie

We were closed during November to follow guidelines, so have applied for the 3rd SEISS and have received confirmation that it is to be paid.
But have to say with all the SEISS and the grants for small businesses issued by the councils, we will be over and above for profits this year compared to last year.

Jeremy535897

hunnie said:

We were closed during November to follow guidelines, so have applied for the 3rd SEISS and have received confirmation that it is to be paid.
But have to say with all the SEISS and the grants for small businesses issued by the councils, we will be over and above for profits this year compared to last year.

That is not the question. The question is whether the loss of profits from reduced activity etc in the period 1 November 2020 to 29 January 2021 due to coronavirus is "significant" in the context of expected trading profits in the current year. Any business closed over the whole of November due to government legislation on coronavirus is almost certain to meet this test.

dg121

I'm in the same position as hunnie in that I couldn't really operate during November due to stringency of government guidelines and not only that but two places of work I would ordinarily be working throughout this year has not been happening since March (and will continue not to into the new year) due to coronavirus impact too.

I personally see this as very significant. What confuses me is the whole projected profits from that vs the SEISS grants 1/2 amounts and comparing against that.

I also managed to find a little extra work not related to my main business to tide me over a bit though chances are this is something I would have taken on even if it was business as normal this year with my other stuff. So do I count that or not? My main business has still been significantly affected.

I.e. when it says significantly impacting profits over the year, I presume I can still say so because my main business has had significant profit hits and even with the other side thing, I'm still missing my main profits from my main gigs?

Jeremy535897

Record all your thinking on a piece of paper so that if you are ever asked, you can explain your reasoning. As the MSE guidance says, HMRC are not going to come down hard on genuine claimants who inadvertently misinterpret the guidelines. They will come down hard if they find fraud.

MattMattMattUK

dg121 said:

I.e. when it says significantly impacting profits over the year, I presume I can still say so because my main business has had significant profit hits and even with the other side thing, I'm still missing my main profits from my main gigs?

As a self employed person you do not have a "main business", you trade and make a profit and as far as being self-employed that is all that counts. 

Jeremy535897

MattMattMattUK said:

dg121 said:

I.e. when it says significantly impacting profits over the year, I presume I can still say so because my main business has had significant profit hits and even with the other side thing, I'm still missing my main profits from my main gigs?

As a self employed person you do not have a "main business", you trade and make a profit and as far as being self-employed that is all that counts. 

You have to complete a separate form SA103 for each individual trade you have, but for SEISS purposes they are treated as one. (If you are a farmer, for example, and also a contractor, farmer's averaging applies only to farming profits.) See notes to SA103F:
"You may need to fill in more than one set of ‘Self-employment’ pages if you have:
 • more than one business, even if you only have one set of accounts covering all your businesses
 • recently started or ceased in business or have changed your accounting date and you work out your profits for your basis period using more than one set of accounts"