Fourth grant denied because other income exceeded my CIS profits 19/20

Daniel2021

Couldn't get any of the other grants because i hadn't been registered as CIS for long enough as i had been CIS through my Ltd up until mid 2019.
So i was really pleased to hear that people like me would be able to get the fourth grant until i phoned HMRC and they told me that i did not qualify as my other income in tax year 19/20 exceeded my CIS profits by £49.
This is really unfair as i was affected by loss of earnings during the lockdown & why are they using the 19/20 tax year to calculate if I qualify as not only was this a transitional period from Ltd to CIS for me but was also well before the pandemic even existed.
Is there nothing i can do? 

Jeremy535897

They use self employed profits for 2016/17 to 2019/20, but if you were only self employed in 2019/20, what else do you expect them to use? 2020/21 does not have to be filed until 31 January 2022, although most subcontractors file in early April if they are due a refund.

poppy12345

That's because it's part of the eligibility crtieria. As your other income was more than your self employed income for that year then you don't qualify. As you weren't self employed in previous years there's nothing to claim.

https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

How HMRC works out your eligibility based on your tax returns

To work out your eligibility for the fourth grant we’ll 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 or more than your non-trading income.

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

Daniel2021

Okay but the criteria is still not fair as i thought that the whole point of the grants were to help people who were effected during the pandemic so i don't know why all the complicated criteria. Thanks for the replies. 

Daniel2021

And why does self employed through my Ltd company not count? 

Jeremy535897

Daniel2021 said:

And why does self employed through my Ltd company not count? 

You were an employee of your limited company, not self employed.

Pennywise

Daniel2021 said:

Okay but the criteria is still not fair as i thought that the whole point of the grants were to help people who were effected during the pandemic so i don't know why all the complicated criteria. Thanks for the replies. 

Yes, indeed, the criteria isn't fair, but it is what it is.  Perhaps you should write to your MP to help put pressure on Rishi to deal with these unfair anomalies.

mattyprice4004

Forming a limited company and being employed by it seemed like a good idea for the tax breaks - however we're now seeing the flip side. 
You're not self employed, you are employed and have enjoyed the lower tax this allows you to pay. If you'd been fully self-employed you'd get the grand (subject to other criteria). 

MattMattMattUK

mattyprice4004 said:

Forming a limited company and being employed by it seemed like a good idea for the tax breaks - however we're now seeing the flip side. 

The "tax breaks" are not really worth it for most people, the savings in their tax and NI payments might amount to 2-3%, in a best case scenario for a high earner (well into six figures) it might end up reaching 10%. However for most people the additional costs of accounts for a limited company will probably wipe out any potential tax savings.

I run a Limited company, the reason is not anything to do with taxation, but largely because the majority of my customers would not deal with a sole trader, where as they will happily deal with limited companies. There is also the protection offered by limited liability which whilst I hope I never have to rely on it, is a useful thing to have in place.

mattyprice4004 said:

You're not self employed, you are employed and have enjoyed the lower tax this allows you to pay. If you'd been fully self-employed you'd get the grand (subject to other criteria). 

I think a lot of people are finally beginning to understand their employment status a bit better over this last year, it is amazing how many limited company directors, employed and paid via PAYE were somehow under the illusion that they were self employed. 

Pennywise

MattMattMattUK said:

I think a lot of people are finally beginning to understand their employment status a bit better over this last year, it is amazing how many limited company directors, employed and paid via PAYE were somehow under the illusion that they were self employed. 

Doesn't help when mortgage firms and other govt depts regard small company directors as "self employed", i.e. for state benefits, etc.  There is no consistent messaging.  That's even more confusing now that the employment courts have created a new status of "worker" where someone can get employment benefits as a pseudo employee but remains taxable as self employed.  Then you have some industry freelancers (such as actors) who are on the engaging firm's payroll for NIC but are self employed and pay SE tax via self assessment. It's all a mess and needs sorting.

68ComebackSpecial

Pennywise said:

MattMattMattUK said:

I think a lot of people are finally beginning to understand their employment status a bit better over this last year, it is amazing how many limited company directors, employed and paid via PAYE were somehow under the illusion that they were self employed. 

Doesn't help when mortgage firms and other govt depts regard small company directors as "self employed", i.e. for state benefits, etc.  There is no consistent messaging.  That's even more confusing now that the employment courts have created a new status of "worker" where someone can get employment benefits as a pseudo employee but remains taxable as self employed.  Then you have some industry freelancers (such as actors) who are on the engaging firm's payroll for NIC but are self employed and pay SE tax via self assessment. It's all a mess and needs sorting.

That makes eminent sense as company directors, unlike other employees, have the ability to vary their pay to suit themselves. If they were treated in the same way as other employees for benefit purposes then there would be nothing to stop them paying themselves a minimal income for eleven months of the year, claim maximum entitlement of Universal Credit and then, in the twelfth month, pay themselves an enormous bonus - and then repeat year after year.