SEISS recalculation?

Jeremy535897

From HMRC regarding SEISS 4 to tax agents:

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 client’s trading profits for up to four tax years between 2016 to 2020, where available.

[Deleted User]

selfemployedPT said:

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.)

Huh? It doesn’t say that? 

It clearly states the under 50k profit is a separate step to determine if you are eligible as in yes or no, not for determining the amount paid. 

‘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.’

If your accountant is telling you that I’d suggest finding a new one.

Where does it clearly state the eligibility is a seperate step ? Please can you supply either Gov or HMRC evidence to support that ?  Even Jeremy is accepting that it hasn’t been explicitly stated by HMRC that it is the case. I agree that it seems odd that the average trading profits calculation would change for the fourth and fifth grant but no one can supply official evidence that it will stay the same. The words in the following Gov wording ‘WE WILL THEN LOOK AT’ is what I’m basing my whole case on. 

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]

DjangoUnchained said:

Jeremy535897 said:

From ICAEW today:

The fourth SEISS grant covers February to April 2021. It has been set at 80% of three months’ average trading profits and is capped at £7,500. Average trading profits is over the four years 2016/17 - 2019/20, where available.

HMRC will contact potentially eligible taxpayers in mid-April and applications will be open from late April to the end of May 2021. Many will be disappointed that claims cannot be made until late April, but HMRC needs that time to check the 2019/20 tax return data and to carry out pre-verification checks. 

is what i believe too, i had this email from hmrc

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.

Hi thanks, this looks very helpful. Are you able to supply the whole email or a link ?

[Deleted User]

Jeremy535897 said:

From ICAEW today:

The fourth SEISS grant covers February to April 2021. It has been set at 80% of three months’ average trading profits and is capped at £7,500. Average trading profits is over the four years 2016/17 - 2019/20, where available.

HMRC will contact potentially eligible taxpayers in mid-April and applications will be open from late April to the end of May 2021. Many will be disappointed that claims cannot be made until late April, but HMRC needs that time to check the 2019/20 tax return data and to carry out pre-verification checks. 

Thanks Jeremy, a very reputable source but it’s not a GOV or HMRC source so I will continue to keep my (blind) faith in my accountant. As I said before, I know I’m the odd one out here and 99% of people online are in agreement with you but having been excluded I’m choosing to cling onto the hope that he and I are right that I might be included this time round. 

unholyangel

dave8989 said:

selfemployedPT said:

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.)

Huh? It doesn’t say that? 

It clearly states the under 50k profit is a separate step to determine if you are eligible as in yes or no, not for determining the amount paid. 

‘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.’

If your accountant is telling you that I’d suggest finding a new one.

Where does it clearly state the eligibility is a seperate step ? Please can you supply either Gov or HMRC evidence to support that ?  Even Jeremy is accepting that it hasn’t been explicitly stated by HMRC that it is the case. I agree that it seems odd that the average trading profits calculation would change for the fourth and fifth grant but no one can supply official evidence that it will stay the same. The words in the following Gov wording ‘WE WILL THEN LOOK AT’ is what I’m basing my whole case on. 

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."

The fourth grant info (that you yourself have just linked to) has 4 sections just now. 1 Who can claim (aka who is eligible). 2 What is covered (aka how much you'll get). 3&4 not relevant here. Two different sections because it's two separate matters. Same with my previous post explaining which paragraphs of the previous SEISS grants applied when checking eligibility and which applied when calculating the amount you'd receive. 

[Deleted User]

What do people think about this scenario 

“ 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.” - My 19/20 trading profits are under £50K, I also pass the at least 50% 

income from SE criteria. I am eligible!
( *’unholy Angel’ please note that the GOV quote above uses ‘profitS’ when referring to the single 19/20 tax return which nullifies your ‘average trading profits’ point you interestingly raised.)

“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." I am eligible based on 19/20, so there is no need to look at my 2016/17,17/18,18/19 to check my eligibilty right ? Surely We can all agree this can’t be interpreted any other way? 

As Jeremy has said, let’s not confuse Eligibility and Quantum. 

I have proved above that I am eligible based on the official Gov wording above. 

I am eligible but If The average trading profits calculation
then uses my past 4 years tax returns to create an average 3 months figure, then the calculations will be using an average above 50k to base my 3 months average trading profits figure. With the grant capped at £7,500 for the 4th grant, it doesn’t really matter if my calculation is based off an average trading profits figure above £ 50K unless that suddenly makes me ineligible. This would be mixing up eligibility and quantum. 

Maybe I’ve been misunderstanding but are people agreeing that you can be eligible based on your 19/20 tax return  and then HMRC use the 16/17,17/18,18/19,19/20 tax returns to create your average trading profits and even if that average is above the 50k you are still eligible as you passed the ‘step 1’ 19/20 tax year eligibility criteria ? Jeremy If you disagree with this then you are agreeing that the quantum calculation would suddenly make me ineligible. 

Everyone seems to be basing their arguments on the previous grants calculations but I really can’t get passed the official gov wording 
“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."

I’ve read this official gov wording from the official policy so many times and I can only think they will ONLY include looking

at your 16/17,17/18,18/19 tax returns if you DON’T qualify based solely on 19/20 tax return. 

Read it again “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.” Why would they look at my 16/17,17/18,18/19 tax years if I am eligible based on my 19/20 year ? I don’t understand how people can read that official policy gov wording and not agree unless you are letting the previous grant eligibility influence your understanding of it. 

Jeremy535897

dave8989 said:

Jeremy535897 said:

From ICAEW today:

The fourth SEISS grant covers February to April 2021. It has been set at 80% of three months’ average trading profits and is capped at £7,500. Average trading profits is over the four years 2016/17 - 2019/20, where available.

HMRC will contact potentially eligible taxpayers in mid-April and applications will be open from late April to the end of May 2021. Many will be disappointed that claims cannot be made until late April, but HMRC needs that time to check the 2019/20 tax return data and to carry out pre-verification checks. 

Thanks Jeremy, a very reputable source but it’s not a GOV or HMRC source so I will continue to keep my (blind) faith in my accountant. As I said before, I know I’m the odd one out here and 99% of people online are in agreement with you but having been excluded I’m choosing to cling onto the hope that he and I are right that I might be included this time round. 

My earlier post came direct from HMRC:
From HMRC regarding SEISS 4 to tax agents:

"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 client’s trading profits for up to four tax years between 2016 to 2020, where available."

They look at 2019/20 to see if you pass the 50% and £50,000 tests. If you do, they then calculate the grant based on an average of trading profits from 2016/17 to 2019/20. It doesn't matter if any of or all of 2016/17 to 2018/19 exceed £50,000 or don't meet the 50% test.

If you don't pass the 50% and £50,000 tests for 2019/20, they will apply these tests for the four years 2016/17 to 2019/20 in aggregate. If you pass the tests, the grant is calculated on the average of the four years as above. That is how SEISS 1,2 and 3 worked (but using 2018/19 and 3 years not 2019/20 and 4 years).

lisastevo

@dave8989 If you meet the eligibility criteria for 2019/2020 then they will not even need to reference the other years for the purpose of eligibility which by the sounds of it you haven’t got SEISS 1,2 or 3 because you were over the £50k threshold am I right?

Sounds to me now that with a drop in trading profits for 19/20 you will qualify for SEISS 4 grant based on 19/20 alone now you are under the £50k rule BUT for calculation purposes your grant will be an average of the 4 years capped at £7500

Dazed_and_C0nfused

dave8989 said:

What do people think about this scenario 

“ 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.” - My 19/20 trading profits are under £50K, I also pass the at least 50% 

income from SE criteria. I am eligible!
( *’unholy Angel’ please note that the GOV quote above uses ‘profitS’ when referring to the single 19/20 tax return which nullifies your ‘average trading profits’ point you interestingly raised.)

“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." I am eligible based on 19/20, so there is no need to look at my 2016/17,17/18,18/19 to check my eligibilty right ? Surely We can all agree this can’t be interpreted any other way? 

As Jeremy has said, let’s not confuse Eligibility and Quantum. 

I have proved above that I am eligible based on the official Gov wording above. 

I am eligible but If The average trading profits calculation
then uses my past 4 years tax returns to create an average 3 months figure, then the calculations will be using an average above 50k to base my 3 months average trading profits figure. With the grant capped at £7,500 for the 4th grant, it doesn’t really matter if my calculation is based off an average trading profits figure above £ 50K unless that suddenly makes me ineligible. This would be mixing up eligibility and quantum. 

Maybe I’ve been misunderstanding but are people agreeing that you can be eligible based on your 19/20 tax return  and then HMRC use the 16/17,17/18,18/19,19/20 tax returns to create your average trading profits and even if that average is above the 50k you are still eligible as you passed the ‘step 1’ 19/20 tax year eligibility criteria ? Jeremy If you disagree with this then you are agreeing that the quantum calculation would suddenly make me ineligible. 

Everyone seems to be basing their arguments on the previous grants calculations but I really can’t get passed the official gov wording 
“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."

I’ve read this official gov wording from the official policy so many times and I can only think they will ONLY include looking

at your 16/17,17/18,18/19 tax returns if you DON’T qualify based solely on 19/20 tax return. 

Read it again “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.” Why would they look at my 16/17,17/18,18/19 tax years if I am eligible based on my 19/20 year ? I don’t understand how people can read that official policy gov wording and not agree unless you are letting the previous grant eligibility influence your understanding of it. 

You still seem to be getting confused between eligibility and how the grant is calculated.  The bit below is clearly just about eligibility.  So if you are eligible based on the 2019:20 return there won't be any need to look at the other returns for the purposes of establishing eligibility.

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.

Once eligibility has been established they will they calculate your grant.  By looking at the return for all 4 years.  

For the grant calculation SEISS 3 did consider years where profits exceeded £50k.

If you have traded for all 3 tax years

To work out your average trading profit we add together all profits and losses for all 3 tax years that you’ve had continuous trade, then divide by 3.

Example

	2016 to 2017	2017 to 2018	2018 to 2019	Average trading profit for the 3 tax years
Trading profit or loss	£60,000	£60,000	-£30,000 loss	£30,000

[Deleted User]

Hi,

Thanks for the replies. We agree that based solely on my 19/20 trading profits being under £50K and meeting the 50% income from SE criteria that I’m eligible. The grant calculation will be based on my 2016/17, 17/18, 18/19, 19/20 trading profits which is a figure over £50k but that will not affect my eligibility. The £ 7,500 cap will be applied.

We can agree that trading profitS (with an S) can refer to the singular 19/20 tax return. 

Yes I was excluded from the SEISS 1-3 grants even while the music industry (my profession) continues to be decimated. Frustratingly for me I was excluded from receiving £21,570 based on my 16-19 average trading profits being just over the wrong side of £50K. A self employed couple both earning a relatively similar amount but the right side of the £50k cap will have a combined SEISS 1-3 grants of £ 43,140....Please excuse any frustrating posts. The SEISS is a very sensitive subject to me.