Can I claim third SEISS grant?

70Ed

Sorry for another SEISS post, but obviously everyone's circumstances are specific to them and although I have read other posts I cannot find anything that covers my situation. I am worried about this and don't want to claim if I am not entitled. 

I work in digital media from home, part-time freelance, and have done for 10 years. 

My work has slowly dried up as the year has gone on. Last month I lost my only regular contract. I am around 40% down on previously average annual profits (where I have worked the full year, as explained below). Nov/Dec have previously been very good months for me, and it looks like I am going to be down by 60/70% each of these month this year. I am still working and trying to find new work too.

My issue is that at no point have I been told in writing that the limited amount of work available, or loss of contracts, is specifically down to Covid, although it is seemingly down to the impact on the economy, although again this has not been said specifically. It is quite a secretive and uncommunicative industry, and it is normal to receive no explanation like this. I would not receive an explanation if I specifically asked for one.  

My other issue is that over the past 4 years I have spent a total of 21 months (not all in one block, 2016/2017 and 2019) on maternity leave so this has skewed average profits which worries me when comparing 20/21 to other years. 

The first two grants are the only thing that has kept me afloat and able to pay household bills. I was relying on the third grant but would rather struggle than claim wrongfully. 
Can anyone give me an opinion on my situation please? 

Jeremy535897

Previous years are not relevant in assessing whether you can claim SEISS 3 (although they might give some indication of expected levels of profit in the current year). The first test is:

"Reasonable belief

In order to claim, you must reasonably believe that you will suffer a significant reduction in trading profits due to reduced business activity, capacity or demand or inability to trade due to coronavirus during the period 1 November to 29 January 2021. You must keep evidence that shows how your business has been impacted by coronavirus resulting in less business activity than otherwise expected."

It is entirely reasonable for you to ask why you have lost your only regular contract. Did you do something to upset them? Have they taken on someone else to do the work? Or is it that coronavirus has affected their business too, and they have decided to cut out this work?

The second test is whether the reduction in work is "significant" in the context of your trading profits in the current basis period:

"Significant reduction

Before you make a claim, you must decide if the impact on your business will cause a significant reduction in your trading profits for the tax year you report them in.

HMRC cannot make this decision for you because your individual and wider business circumstances will need to be considered when deciding whether the reduction is significant.

You should wait until you have a reasonable belief that your trading profits are going to be significantly reduced, before you make your claim.

There are some examples that can help you decide. "

You are not comparing 2020/21 to 2019/20. You are comparing the current year's likely trading profits to what you think they would have been if you were not suffering from reduced business capacity, activity or demand in the period 1 November 2020 to 29 January 2021. You might like to read this thread as it covers a lot of ground:

https://forums.moneysavingexpert.com/discussion/6219378/more-seiss-doubts

70Ed

Jeremy535897 said:

It is entirely reasonable for you to ask why you have lost your only regular contract. Did you do something to upset them? Have they taken on someone else to do the work? Or is it that coronavirus has affected their business too, and they have decided to cut out this work?

Thanks very much for your reply, I really appreciate it and feel better about the maternity leave situation now. 

As I said, I would not get an explanation even if I asked for one. It's all very secretive, lots of huge companies, lots of NDA's, minimal communication and very limited information given to freelancers like me. It's always made clear projects can end suddenly with minimal notice if demand changes. Normally new ones can be found very easily but this is not the case at the moment. They also would not provide explanation for reduced work availability for contracts still ongoing but with less work than usual either. This is my concern, that I cannot prove my drop in profits is down to Covid, despite the fact I have had a regular income doing this work for 10 years and my profits have only dropped since the pandemic began. 

Jeremy535897

I know you said you would get no explanation, but if you explain that your eligibility for SEISS 3 depends on you having evidence to support your claim, might they not oblige? Have you anything to lose?

70Ed

Jeremy535897 said:

I know you said you would get no explanation, but if you explain that your eligibility for SEISS 3 depends on you having evidence to support your claim, might they not oblige? Have you anything to lose?

You're right, it's worth a try, but I am 99.9% sure I will not get confirmation. Without this, would you say I am unable to apply? Obviously I have invoices which show my earnings are reduced dramatically, but nothing that specifically states this is down to Covid. I feel so stuck as I was really relying on this.  

Jeremy535897

If I could not get confirmation, I would create a document that sets out the facts, and why I believe that the loss of the contract is due to coronavirus, explaining the nature of the industry and its secrecy, and attach the email exchange where you tried to obtain confirmation. I think that would evidence that you "reasonably believe" that the reduction in your business activity is caused by coronavirus. I cannot guarantee that it would work, but I also cannot see how you could be criticised for claiming, even if some review later decided you couldn't. (The probability of you being asked any questions at all by HMRC is of course small.)

70Ed

Jeremy535897 said:

If I could not get confirmation, I would create a document that sets out the facts, and why I believe that the loss of the contract is due to coronavirus, explaining the nature of the industry and its secrecy, and attach the email exchange where you tried to obtain confirmation. I think that would evidence that you "reasonably believe" that the reduction in your business activity is caused by coronavirus. I cannot guarantee that it would work, but I also cannot see how you could be criticised for claiming, even if some review later decided you couldn't. (The probability of you being asked any questions at all by HMRC is of course small.)

Thanks very much. I will do this and hope for the best!

johe

What an interesting thread!

As a graphic designer freelancer my income is down 48% (not including SEISS1 and 2). This is due to loads of different things and will continue until we're back to normal next year: 1) I work for a number of chains of bars, restaurants and event spaces who have not been able to put on events or refresh their menus, 2) I work for a few research agencies who have much less research than usual, 3) I work for Mergers & Acquisitions businesses who's business selling has been postponed, 4) I work for a town council who have not needed as much work for initiatives, events etc etc.

Sometimes as the lonely freelancer I am 3rd or 4th down the line of outsourcing. I can prove my income is down and explain why (with stats), but I probably won't be able to get definitive proof from all of the businesses I work for.

I have been trying to take on extra clients and work, but there is less work overall to go round.

Does this mean I can't claim SEISS 3? Because I have no proof, and as a freelancer I could still have been working to 100% if I'd somehow found enough extra work?

Jeremy535897

The details of  the significant reduction are here:
https://www.gov.uk/guidance/how-your-trading-conditions-affect-your-eligibility-for-the-self-employment-income-support-scheme

Read the above, and then I would suggest you seek what evidence you can, and type out a document that explains your thinking. Being able to say "I normally do events at venues A, B and C but they were all shut for 4 weeks during lockdown" should be helpful. Do it now, because memory fades very quickly.

HMRC will not be going through every claim after the event and pointing to actual results, by the way.

Grumpy_chap

I don't think it is necessary for either the OP or johe to go back to customers to get a statement that the work is cancelled / delayed because of coronavirus.  Nor do I think making such a request is advisable as customers may not want to give a reason, may feel the reason is self-evident, or may just think this is an awkward supplier and they'll prioritise another in the future.

As Jeremy sad, the important thing is to keep evidence of the decision rationale and the measure is "reasonable belief" that the reduced activity, capacity or demand is "because of coronavirus" and will have the "significant" impact on profits.

Establishing the reduction and "because of coronavirus" and the "reasonable belief" seem straight-forward enough terms, the vague one is the whether the impact on profits is "significant".  The OP and johe may be interested in this thread:
https://forums.moneysavingexpert.com/discussion/6219378/more-seiss-doubts#latest

Jeremy535897

There is also https://www.moneysavingexpert.com/news/2020/06/i-am-self-employed-but-confused-about-whether-i-can-claim-my-bus/