Seiss grant 3 and 4 advice

Thecreative

I'm self employed in graphics & corporate branding and have a few queries on how the grants will be assessed for my circumstances.
1st grant period basically all my clients closed.

2nd grant period picked up a little but well down on usual client enquiries.

3rd/4th grant period, several clients still not back, no work in retail as staff furloughed, a full week without a single enquiry, construction work on hold, no work for 11 months to date on retirement/care home sites, limited travel and clients moving to other suppliers nearer to avoid travel/overnights, clients busy with covid screens etc.. meaning usual work just not existing.

The seiss was based on the 3 years accounts, in that period I had invested in some kit thus lowering profits a little and also a lot of R&D which also limited my time to earn. I appreciate last years profits are not taken into account but they were higher and I was expecting this years to grow again so the question is what are they going to base their assessment on, is it going to be comparable on the 3 year period or are they going to accept that through the work I have lost then I am 'substantially' out of pocket despite the fact my profits will be higher overall. Its obviously not practical for them to assess each case individually so how are they going to decide what's a legitimate claim and what isn't ?

I have picked up a couple of medium sized projects and under normal circumstances would knit in all my other enquiries in when out covering these visits (this boosts my profits as I'm effectively already in an area and have no travel cost) However there haven't been the usual enquiries despite me being in constant touch with my contacts as the industry has been badly effected - does these factors justify my claim ?

Thanks in advance for any opinion.

Jeremy535897

See https://www.gov.uk/guidance/how-your-trading-conditions-affect-your-eligibility-for-the-self-employment-income-support-scheme#examples

There are many threads discussing the issues on this forum. Put SEISS 3 in the search box. There are no details yet for SEISS 4.

Thecreative

Thanks I've read all that, none of it deals with how they assess 'substantial loss' is it a couple of hundred pounds, 500, 1000 ????

Any if they do look into it are they going to view the figures against the 3 years they based the grant on or look at he more recent filing now in the system which could be much higher? Some people could have little or no profits for the 3 years but then once set up had a massive increase for the 4th year with planned growth for the 5th year where the grants are in play.

leopoldo_2

I sympathise with your predicament, I have been wrestling with the same question myself (for grant 3 at least). You have to consider whether the reduction in profit (compared to what you would otherwise have expected if it hadn't been for Covid) is significant within the context of the whole tax year. In other words, what do you now expect to earn during the current tax year? Is the reduction for Nov-Jan significant within that context? You exclude any past grants claimed from your calculations.

I claimed on Friday after a lot of careful consideration. I estimated my reduction based on Nov-Jan figures from the previous 3 years (since that is the basis for the amount awarded, other people will use other criteria I expect) and then considered that as a proportion of my current projection for this year's taxable earnings. It's around 10% and, from what I gather, most people agree that this would be significant. So I made the claim.

If previous grants were considered, I would not have applied, as with all 3 grants my revenue for the year will actually be comfortably above average (which is what gave me pause for thought about claiming). I only claimed because it seemed foolhardy not to with the current uncertainty, but I will definitely not claim the 4th as that would feel abusive.

Jeremy535897

Thecreative said:

Thanks I've read all that, none of it deals with how they assess 'substantial loss' is it a couple of hundred pounds, 500, 1000 ????

Any if they do look into it are they going to view the figures against the 3 years they based the grant on or look at he more recent filing now in the system which could be much higher? Some people could have little or no profits for the 3 years but then once set up had a massive increase for the 4th year with planned growth for the 5th year where the grants are in play.

My personal view, which was in earlier posts, was that 10% is definitely significant, £5,000 is definitely significant, both under 5% and under £1,000 is not significant, and in between it depends on your circumstances. 

Thecreative

Well I'm not in the top bracket, the grant was based on 28,000 - The government need to be clearer and say what they are expecting they cant possibly leave it so unclear, I've already made the third claim which I'm happy enough about meeting the criteria I will assess the fourth but to be honest I think a lot of people are going to claim then see what happens.

Grumpy_chap

The rules for the 4th SEISS grant will not be announced until the budget in March.  No point speculating or guessing before then.

Thecreative

Agreed its more peace of mind on the 3rd grant really as them not defining 'substantial' is quite frankly laughable.

Jeremy535897

Thecreative said:

Agreed its more peace of mind on the 3rd grant really as them not defining 'substantial' is quite frankly laughable.

I think you mean "significant".

Grumpy_chap

A significant amount of money would pay for a substantial meal

macman

Thecreative said:

Well I'm not in the top bracket, the grant was based on 28,000 - The government need to be clearer and say what they are expecting they cant possibly leave it so unclear, I've already made the third claim which I'm happy enough about meeting the criteria I will assess the fourth but to be honest I think a lot of people are going to claim then see what happens.

Precisely. The worst that can happen is that you get declined. If you received it and were later asked to pay it back, then you'd be in no different a position than if you had applied for finance in the form of a BBL or other loan.