SEISS part 4... Totally confused if I can claim or not

FlyHigh84

Hi there,

Long term lurker but first time poster... I wonder if you can help me please.

I am a self-employed freelance writer earning anywhere between £1400 and £2100 take home a month. Technically it looks like I qualify for SEISS part 4, but I am finding the Gov and other guidance so vague and despite going through it carefully I can't work out if I can claim or not.

I will keep this as brief as I can.

I did some freelance work for a large holiday/travel company in February last year. It was set to be an ongoing thing, but when coronavirus travel restrictions kicked in loads of people working for the company were made redundant and they dropped me. They said they were very pleased with my work and would have continued with me were it not for Covid (and as Jan-April is usually a busy time for travel bookings I strongly believe they would have needed me this Jan-April too).

When I worked for them in Feb 2020 I earned £1200 after tax from them for that month, which is a fair chunk when you bear in mind my monthly take home. However, as it happens, 2020 ended up being a well-paid year for me thanks to another lucrative client, so overall my earnings for the 2020-21 tax year look very healthy.

So technically I have suffered as I lost the holiday/travel client who would highly likely have used me again this Jan-April and they've told me as much. But of course with travel still not happening due to Covid they're not hiring freelancers again for the moment.

My big worry is that if HMRC saw I had a good year profit-wise last year they would say I didn't need the money and shouldn't have claimed (if I claim part 4 of the grant) and I don't want to end up in trouble down the line. But technically this February I did lose money to Covid.

So confused...

Any thoughts please?

Thanks

PS. I previously claimed parts 1 and 2 but not 3 as the time frame didn't apply to me. 

Jeremy535897

Whether or not you need the money is irrelevant in terms of eligibility. On the face of it, you have lost work due to coronavirus between 1 February 2021 and 30 April 2021. If you also believe your trading profits will be significantly reduced, you meet those tests. The only question is whether you could have obtained other work but chose not to do so. That might make you ineligible.

onashoestring

Do you have any record that the company “dropped” you because of Covid - e-mails for example - as this would help back up your claim if it were questioned it when you claim it at a later date . 

FlyHigh84

Hi there thank you both for your replies.

I have a Skype conversation that I had with the lady who managed me. She said in it that if it wasn’t for Covid they wouldn’t most probably kept me on because they were really pleased with my work. 

FlyHigh84

The Skype conversation confirms that Jan-March is, in normal times, the travel company’s busiest time and that if Covid hadn’t come along they’d have highly likely used my services again this Jan-March

onashoestring

HMRC are running free live webinars to answer questions about SEISS 4th grant you can register for them here: 

https://register.gotowebinar.com/rt/7426576937352216592?source=April-HMRC-GOV

middlingditch

Hi, I'm in a very similar position, and do similar work! I'm no help to you but following this thread in case someone can help.

My biggest freelance client had arranged to give me a big uptick in work in 2020 compared with 2018 & 2019 (I say "arranged" because it wasn't a legally binding contract, but at the start of 2020 they created a purchase order for a certain amount of work in advance of me doing it so I have a paper trail showing that that work was expected to come). Due to the pandemic only about 60% of this work materialised but it was still a bit more than what I had in previous years from them, so my turnover to April 2021 has ended up about the same as previous years. But I had significantly reduced turnover compared to what it *should* have been, because they had formally indicated I would have a lot more that year. 

I have other clients who stopped giving me work altogether and my work from them is still not close to "back to normal", and here and there I picked up one-off bits of other work, but couldn't get much. 

So anyway, I know I have been affected by the pandemic, no question, but my turnover 2020-21 looks from the raw figures as if I haven't been affected, so I'm a bit torn about claiming the 4th grant. All the guidance for the previous SEISS grants here on MSE said "even if you had a normal/better year but *reasonably expected* to have had an even better year than that you can claim" but I'm not really seeing that now?

Whatever happens with the 4th I think my chances of claiming the 5th even at the low level are virtually nil now, because it looks as if they'll go on that blunt turnover figure from the year to April 2021. It feels as if they're tightening up the criteria.

Jeremy535897

If you have evidence that your trading profits have been significantly reduced from what you would have expected them to be without coronavirus, you meet that particular criterion. See:
https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

middlingditch

Thanks, Jeremy. Helpful as always!

I think a lot of us are struggling with what feels like a tension between "reduction" and "less business activity than otherwise expected". "Reduction" implies (to my mind) a solid figure from previous years against which a lesser pandemic turnover can be compared, whereas "less business activity than otherwise expected" seems to take my situation, and that of the OP, into account.

Maybe we are all worrying about it too much, but we are also terrified of having to pay it back in the future or worse, being fined.

Jeremy535897

middlingditch said:

Thanks, Jeremy. Helpful as always!

I think a lot of us are struggling with what feels like a tension between "reduction" and "less business activity than otherwise expected". "Reduction" implies (to my mind) a solid figure from previous years against which a lesser pandemic turnover can be compared, whereas "less business activity than otherwise expected" seems to take my situation, and that of the OP, into account.

Maybe we are all worrying about it too much, but we are also terrified of having to pay it back in the future or worse, being fined.

My own personal view, for what it is worth, is that HMRC is going to have far too much to do chasing down fraudulent claims to argue whether there is sufficient evidence to support a significant reduction in something you have to estimate at the time of the claim.

Pennywise

bluenun said:

Jeremy535897 said:

middlingditch said:

Thanks, Jeremy. Helpful as always!

I think a lot of us are struggling with what feels like a tension between "reduction" and "less business activity than otherwise expected". "Reduction" implies (to my mind) a solid figure from previous years against which a lesser pandemic turnover can be compared, whereas "less business activity than otherwise expected" seems to take my situation, and that of the OP, into account.

Maybe we are all worrying about it too much, but we are also terrified of having to pay it back in the future or worse, being fined.

My own personal view, for what it is worth, is that HMRC is going to have far too much to do chasing down fraudulent claims to argue whether there is sufficient evidence to support a significant reduction in something you have to estimate at the time of the claim.

Good point but I wonder if HMRC will be hiring a lot more staff to chase down the fraudulent claims and also to look into others who think they do fit the criteria to claim. I can imagine an investigation would be extremely stressful and long drawn out. Nothing to worry about if you have made a genuine claim but try telling that to someone with anxiety.

I worry that HMRC will go after the easy targets first, i.e. those whose tax returns don't show a huge drop in profits over the year and do some kind of "you weren't entitled so pay it back" letter without actually bothering to spend time engaging with the taxpayer as to whether the grounds for making the claims were valid at the time.  That will frighten a lot of people into just paying them back instead of going through the stress/cost of appeals etc.