SEISS recalculation?

selfemployedPT

Will those who have received all SEISS grants to date get the same figure as the last 80% grant or will the 2019/20 tax return alter it?
thanks

MattMattMattUK

No one outside of government knows as the criteria have not yet been published. 

jsinc

"Your eligibility for the scheme will now be based on your submitted 2019 to 2020 tax return. This may also affect the amount of the fourth grant which could be higher or lower than previous grants you may have received"

https://www.gov.uk/government/publications/self-employment-income-support-scheme-grant-extension/self-employment-income-support-scheme-grant-extension

But not yet clear if that e.g. means average of 4 years or 3 years rolled forward.

macman

No one knows the full detail yet, but my it's reasonable to assume that it will simply roll forward a year, so the latest year will be 19/20 rather than 18/19.

jsinc

macman said:

No one knows the full detail yet, but my it's reasonable to assume that it will simply roll forward a year, so the latest year will be 19/20 rather than 18/19.

I don't know but could be average of up to 4 years:

"The big difference for the SEISS-4 grant is that the figure of average trading profits will include profits reported for the tax year 2019/20. The average profit calculation will include profits from all four tax years from 2016/17 to 2019/20. HMRC performs this calculation from the tax return records it holds, and the taxpayer does not have to submit any figures to claim the grant."

https://www.accountingweb.co.uk/tax/hmrc-policy/budget-2021-two-further-seiss-grants-available

Edit: I've received an email stating (on Fourth SEISS Grant): "The value of the grant is based on an average of your trading profits for up to four tax years between 2016 to 2020, where available"

Tammykitty

jsinc said:

macman said:

No one knows the full detail yet, but my it's reasonable to assume that it will simply roll forward a year, so the latest year will be 19/20 rather than 18/19.

I don't know but could be average of up to 4 years:

"The big difference for the SEISS-4 grant is that the figure of average trading profits will include profits reported for the tax year 2019/20. The average profit calculation will include profits from all four tax years from 2016/17 to 2019/20. HMRC performs this calculation from the tax return records it holds, and the taxpayer does not have to submit any figures to claim the grant."

https://www.accountingweb.co.uk/tax/hmrc-policy/budget-2021-two-further-seiss-grants-available

Edit: I've received an email stating (on Fourth SEISS Grant): "The value of the grant is based on an average of your trading profits for up to four tax years between 2016 to 2020, where available"

This is crazy, profits for 5 years ago still affecting grant amounts, most businesses have increased profits over the last 5 years. and especially start ups - some businesses made minimal profit or even losses 5 years ago, and are now in a reasonable way of going.
Just check the effect this will have on one client (started trading in 15-16, very small profit in 16-17 - received just over £2.2k in previous grants, will receive £2.6k if using 4 years, but would be £3.5k if using the last 3 years, 

MattMattMattUK

Tammykitty said:

This is crazy, profits for 5 years ago still affecting grant amounts, most businesses have increased profits over the last 5 years. and especially start ups - some businesses made minimal profit or even losses 5 years ago, and are now in a reasonable way of going.

That depends what the goal is. If the aim is to continue to offer a level of support, but likely stop that cost escalating whilst also being seen to do the right thing then the policy is well devised. 

DjangoUnchained

I got an email from hmrc and a paragraph states about average trading profits for up to four years.....

the latest.

Fourth SEISS grant

The UK Government will pay a taxable grant which is calculated based on 80% of three months’ average trading profits, paid out in a single payment and capped at £7,500 in total. The value of the grant is based on an average of your trading profits for up to four tax years between 2016 to 2020, where available.

The grant will be available to claim by late April. As with previous grants, trading profits must be no more than £50,000 and at least equal to non-trading income in order to claim the fourth SEISS grant.

Eligibility for the fourth SEISS grant will depend on whether you experienced a significant financial impact from coronavirus between February 2021 and April 2021

[Deleted User]

https://www.gov.uk/government/publications/self-employment-income-support-scheme-grant-extension/self-employment-income-support-scheme-grant-extension

"To be eligible for the fourth grant you must be a self-employed individual or a member of a partnership.

To work out your eligibility we will  first look at your 2019 to 2020 Self Assessment tax return.  Your trading profits must be no more than £50,000 and at least equal to your non-trading income.

If you’re not eligible based on your 2019 to 2020 Self Assessment tax return, we will then look at the tax years 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020."

[Deleted User]

selfemployedPT said:

Will those who have received all SEISS grants to date get the same figure as the last 80% grant or will the 2019/20 tax return alter it?
thanks

If your net profit was under £ 50,000 for the tax year 2019/2020 then the grant will be based on that year's figure alone. If you're net profit was over £ 50,000 for 19/20 then "we will then look at the tax years 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020." (I'm sure there will be many other eligibility issues other than the £ 50k threshold.)

Jeremy535897

dave8989 said:

selfemployedPT said:

Will those who have received all SEISS grants to date get the same figure as the last 80% grant or will the 2019/20 tax return alter it?
thanks

If your net profit was under £ 50,000 for the tax year 2019/2020 then the grant will be based on that year's figure alone. If you're net profit was over £ 50,000 for 19/20 then "we will then look at the tax years 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020." (I'm sure there will be many other eligibility issues other than the £ 50k threshold.)

You are confusing eligibility with quantum. The eligibility tests are based first on 2019/20 (step 1) (under £50,000 profit, income at least 50% from self employment). If the claimant fails one or both of these tests, HMRC look at the same tests for 2016/17 (step 2) (or later if the trade started later), 2017/18, 2018/19 and 2019/20 all together. If the claimant passes both tests at step 1, or failing that, step 2, then providing all other eligibility criteria are met, the quantum of the grant is 80% of three months' average profits for the 4 years 2016/17 to 2019/20, or from the tax year the trade started, if later.