More SEISS doubts

leopoldo_2

I'm not really au fait with the legalities so I'm inclined to agree with you, but I'm not sure that any of that means that previous grants have to be considered when determining eligibility. That said, trading profits will include the grants for tax purposes, which I assume is why you say that they can't be discounted? 

Grumpy_chap

Jeremy535897 said:

I don't see any scope here for Admin 14's view, but I would love someone to prove me wrong.

I wouldn't.
Taken to the extreme, Admin 14's view would mean a sole-trader could have received £15k through SEISS 1 & 2 but no real impact on work, and have a reduction in capacity now (or fabricate a reduction in capacity) of only a modest amount, say £2k, but determine that as significant and then claim another £7.5k.
Totally inconsistent with the application of CJRS, which specifically required the individual not to do any work.
The aim of SEISS was to provide a way to replicate CJRS for sole-traders and to provide compensation for loss-of-profits suffered by sole-traders because of coronavirus.  Not to supplement their income if coronavirus has had no or limited impact on work.  Indeed, the first SEISS was introduced at pace and one can only imagine the reason for introducing the link to profits for SEISS 3 is to correct an omission from SEISS 1 & 2.

Jeremy535897

Grumpy_chap said:

Jeremy535897 said:

I don't see any scope here for Admin 14's view, but I would love someone to prove me wrong.

I wouldn't.
Taken to the extreme, Admin 14's view would mean a sole-trader could have received £15k through SEISS 1 & 2 but no real impact on work, and have a reduction in capacity now (or fabricate a reduction in capacity) of only a modest amount, say £2k, but determine that as significant and then claim another £7.5k.
Totally inconsistent with the application of CJRS, which specifically required the individual not to do any work.
The aim of SEISS was to provide a way to replicate CJRS for sole-traders and to provide compensation for loss-of-profits suffered by sole-traders because of coronavirus.  Not to supplement their income if coronavirus has had no or limited impact on work.  Indeed, the first SEISS was introduced at pace and one can only imagine the reason for introducing the link to profits for SEISS 3 is to correct an omission from SEISS 1 & 2.

Yes, I suppose it could be a cunning plan to stop those who got more out of SEISS 1 and 2 than they would otherwise have made in normal trading from benefiting from SEISS 3 (and probably 4) as well, but I think it will confuse and put off a lot of genuine claimants (maybe that's the even more cunning plan).

While CJRS was originally touted as a job preservation scheme, as soon as they allowed ex-employers to rehire employees it became clear that it was really a benefit to employees, like SEISS is to the self employed.  

justwhat

lol So what now? lol . 
Could the grants be taxed/treated in same way as unearned income? Because its not technically profits from trading .

Also in comparison to CJRS there seem to be more rules stopping people claiming SEISS. There are no checks on turnover or profit for CJRS.

Jeremy535897

justwhat said:

lol So what now? lol . 
Could the grants be taxed/treated in same way as unearned income? Because its not technically profits from trading .

Also in comparison to CJRS there seem to be more rules stopping people claiming SEISS. There are no checks on turnover or profit for CJRS.

No, because their tax treatment is set out in paragraph 1 of schedule 16 FA 2020, as I posted earlier.

dg121

Their tax treatment in legislation is no surprise because otherwise they couldn't tax them and they would be an un-taxable grant legally. So I can see a situation where they are taxable in legislation as posted above, so HMRC can actually claim tax back on them AND them not being counted towards eligibility of SEISS 3 simply because HMRC say so.

This is all very complicated, and your average person probably isn't expected to trawl through legislation like the above in determining their eligibility. I imagine any omission of trawling through that legislation or misinterpreting it would not put someone into the bracket of the fraudulent claims that HMRC are going to come down hard on. More likely if anything, they'll put you into the bracket of "shouldn't have claimed but we don't think you're fraudulent so just pay it back" would be my guess?

Jeremy535897

dg121 said:

Their tax treatment in legislation is no surprise because otherwise they couldn't tax them and they would be an un-taxable grant legally. So I can see a situation where they are taxable in legislation as posted above, so HMRC can actually claim tax back on them AND them not being counted towards eligibility of SEISS 3 simply because HMRC say so.

This is all very complicated, and your average person probably isn't expected to trawl through legislation like the above in determining their eligibility. I imagine any omission of trawling through that legislation or misinterpreting it would not put someone into the bracket of the fraudulent claims that HMRC are going to come down hard on. More likely if anything, they'll put you into the bracket of "shouldn't have claimed but we don't think you're fraudulent so just pay it back" would be my guess?

They could easily have chosen some other way to tax them. However, the legislation was drafted long before the conditions in SEISS 3 were invented. I agree that HMRC seem to be taking a reasonable line. Their emails to people saying they had ceased to trade in 2019/20 (thus clearly failing one of the conditions) asked for acceptance and repayment within a time period, without interest or penalty.

dg121

That's very reassuring. It makes sense too that they show a lot of leniency not just because of the circumstances of the year and the reasons for even needing these grants, but the complications in interpreting the rules. I'm still figuring out the numbers on my side and working out if I can justify a claim. It's confusing with the whole inclusion of the SEISS 1/2 grants as trading profits etc. Even if after doing the sums I feel I'm eligible to claim and deemed not eligible further down the line, I think its only fair to not treat me harshly for that.

It also at the same time makes sense they do come down hard on legitimate attempts at fraudulently claiming the grants.

clt1979

dg121 said:

That's very reassuring. It makes sense too that they show a lot of leniency not just because of the circumstances of the year and the reasons for even needing these grants, but the complications in interpreting the rules. I'm still figuring out the numbers on my side and working out if I can justify a claim. It's confusing with the whole inclusion of the SEISS 1/2 grants as trading profits etc. Even if after doing the sums I feel I'm eligible to claim and deemed not eligible further down the line, I think its only fair to not treat me harshly for that.

It also at the same time makes sense they do come down hard on legitimate attempts at fraudulently claiming the grants.

I agree, I feel I have been affected (profits down about 50% from last year) although I have worked through mostly. Had no work for a couple of weeks last month and only been on a day rate compared to earning good money on price jobs that aren’t there at the moment. On the other hand, I aren’t struggling as we aren’t spending because there isn’t much to do.

Jeremy535897

dg121 said:

That's very reassuring. It makes sense too that they show a lot of leniency not just because of the circumstances of the year and the reasons for even needing these grants, but the complications in interpreting the rules. I'm still figuring out the numbers on my side and working out if I can justify a claim. It's confusing with the whole inclusion of the SEISS 1/2 grants as trading profits etc. Even if after doing the sums I feel I'm eligible to claim and deemed not eligible further down the line, I think its only fair to not treat me harshly for that.

It also at the same time makes sense they do come down hard on legitimate attempts at fraudulently claiming the grants.

Apparently the Chartered Institute of Tax is seeking clarification from HMRC on the inclusion or otherwise of COVID support (not just SEISS 1 and 2, but the property based grants too) in "trading profits" for the significant reduction test.