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Self-employment grant 4 announcement won't happen till March
Former_MSE_Steve_1
Former MSE 79 Posts
Martin Lewis has just had Treasury confirmation that no official announcement on the 4th Self-Employment Income Support Scheme grant will come until the 3 March Budget
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kind regards
stranded
before the pandemic last January 2020 I was in a lot of debt “good debt” I took a loan to buy stock and paid it back bit by bit after each sale..I had enough stock to last me until maybe Xmas 2020.
however, when the pandemic hit all that stock sold within two weeks, I paid off a chunk of that debt I had no stock and no income!!!
I Normally sell used equiptment,, but the stock I source to service for resale is know being sold well over market value and I couldn't source any to service for resale, I then used the money I had left as a deposit and took a pun on brand new stock from china, and paid it off using the first seis grant, filled a container up and had it shipped over here. Sold it all as pre orders while it was being manufactured…
paid more debt off, paid another deposit and used the second and third grants to do the same as above, with moneys constantly being held in paypal and amazon
I currently have no stock and income again...but have already paid the deposit for manufacturing of more stock and planning on using the 4th grant to fulfil that order!
I hate worrying about this..it just feels like a catch 22, what do I do ??? stop trading while business is good infact great,, better than it has ever been in my 9 years of trading,, and claim universal credits ?? or keep riding this wave and pay anything I owe further down the line ? I think hmrc will have to look at each person individually case by case,
I think maybe if I get a letter further down the line,, they will have to claw back any money from the exact point my profits hit 50K… because I need this 4th grant to pay of the rest of my order or else I will lose my deposit!!!
Third grant
Eligible self-employed individuals, including members of partnerships must intend to carry on trading, and either: be currently trading but are impacted by reduced demand due to coronavirus or have been trading but are temporarily unable to do so due to coronavirus.
Im unable to do so because of lack of stock due to coronavirus!!!
IM STUCK IN A PREDICAMENT!!!!
SEISS 1 & 2 merely required that the business had been negatively impacted by COVID to be eligible for the grant.
Obviously, it is not the intent that the grant subsidised a business that boomed because of COVID, for example face mask manufacturer.
For SEISS 3, the eligibility is the negative impact on trade because of COVID plus the reasonable belief of significantly reduced profits. You appear to fail on the second half of this sentence. Indeed, you say you sold a whole years' worth of stock because of COVID at the beginning of the pandemic and your profits are booming.
Do not even think about SEISS 4 at this stage as there are no details on this, so no-one can advise whether the business will or will not be eligible.
Given that you have sold high volumes of stock, you should be able to fund the next round of stock using profits generated. This should not be dependent upon receiving a grant.
You have not said what it is that you are trading. However, given the booming year, it is not even evident that the business was really impacted for SEISS 1 & 2, though the rules for that were generous. Certainly SEISS 3 seems as though you are likely not eligible.
There is another thread on this topic running at the moment and the comment from @Jeremy535897 is particularly relevant:
https://forums.moneysavingexpert.com/discussion/6235095/seiss-grant-3-and-4-advice#latest
"Penalty for failure to notify: knowledge of non-entitlement to payment
13(1)This paragraph applies to a failure of a person to notify, under section 7 of TMA 1970 (as modified by paragraph 12), a liability to income tax chargeable under paragraph 8 where the person knew, at the time the income tax first became chargeable, that the person was not entitled to the amount of the coronavirus support payment in relation to which the tax is chargeable.
(2)Schedule 41 to FA 2008 (failure to notify) applies to a failure described in sub-paragraph (1) as follows.
(3)The failure is to be treated as deliberate and concealed.
(4)Accordingly, paragraph 6 of that Schedule has effect as if the references to a penalty for “a deliberate but not concealed failure” or for “any other case” were omitted.
(5)For the purposes of that Schedule (except in a case falling within paragraph 14 of this Schedule), the “potential lost revenue” is to be treated as being the amount of income tax which would have been assessable on the person at the end of the last day of the notification period (see paragraph 12(3))."
I don't think HMRC will have the time or inclination to look into every claim, but if they decided to do a sample check, they may well start with those businesses that seem to have done rather better than in the previous year, even excluding the grants. That's not to say that this is the test to use for SEISS, but the probability of finding incorrect claims amongst such a population must be higher than from a random sample.
I think the penalty provisions are likely to be reserved for more blatant cases where no opinion is involved (for example claiming when not actually continuing to trade at all), and even in cases where people claimed and then said they ceased to trade in 2019/20 (thus automatically being ineligible), HMRC simply asked for the money back (but if you didn't pay it back and should have, I expect penalties would then ensue).
I read it as continuation of the same business, just now selling new widgets instead of used widgets. Still a widget seller. Evolution of the same business, not a "new" business replacing the "old" business.
Perhaps strandedwonderer will clarify whether they are still selling widgets (whether used or new), or now selling thingymebobs instead?
hi guys thanks for all your input,,,, & no no. not selling thingmabobs,,, just new widgets as opposed to the old refurbushed used widgets,as they are being panic purchased well above market value,,,still very much the same business, as soon as my old stock becomes back to pre covid prices ill be back to that as thats been my bread and butter that past nine years,,,, and the new stock will try to carry on with it, but may be less demand,,, who knows for the time being! ,,,,,I've used the grants to secure more stock after running out, and income stopped coming in... no grant,,,, no stock....no income!! = negative impact... right ? or have i missed somthing ? its just very confusing,,, the grants are there to help,, and thats what they are doing.... just still feels very catch 22... either way Ill be going ahead wiht the fourth grant to finish paying off my order of more stock,,, wich is still being manufactured,, wiht it being chinese new year,,,, and it takes almost 2 months shipping time... i guess this next order wont be here until maybe next tax year.....
The Benchmark of 50K is for the average net profit of your previous 3 tax returns, as I've been trading 9 years. SEISS isn't based on this years tax return.
eg if I earned 120K net profit over 3 years, My net profit is 40K per annum right ?, I need to stop worrying and have a nice long chat with my accountant.
1. You purchased second-hand widgets pre-covid, refurbished them and sold for a profit. (Monday)
2. You then bought some new widgets, and sold for a profit. (Tuesday)
3. You can rinse-repeat ad-infinitum using funds from selling Monday to buy Wednesday etc.
Yes, speak with your Accountant. That way you get far better advice taking all your situation into account than you can ever get from a couple of random weirdos on the net. And the Accountant has PI cover in place.
You cannot possibly know now that you will claim SEISS 4 as the rules are not published. What if the rules expressly prohibit widget selling as eligible businesses?
I am not even convinced that you are / were eligible for SEISS 3 as the "reasonable belief of a significant reduction in trading profits" eligibility does not seem to have been met. Although the event has to be in the period Nov-Dec-Jan, the reduction in profits is assessed across the basis period.
You seem to be saying that, whatever your widgets are, you sold a whole year's worth of stock in two weeks because of the pandemic and have not been able to source enough to meet demand ever since, even though prices have sky-rocketed. SEISS is not there to subsidise business that are booming because of COVID - and obvious example would be face mask suppliers.
What are the widgets you sell?