SEISS 5th payment zero turnover

deano888

Hi, my dad owns a taxi  but did not work the whole of April 2020 - 21 due to covid (has had taxi 15+years) and has only just started working again. The fifth payment says you have to put a turnover greater than zero for apr 2020-apr 2021 period but he didn't have any turnover? Can he not claim the 5th payment even though he earnt nothing last year? He has already submitted his taxes stating 0 turnover. Thanks in advance

Jeremy535897

If he had zero turnover throughout 2020/21, the likelihood is that HMRC will treat him as not trading in 2020/21. That will then fail one of the conditions for SEISS 5, which is that you had to be trading in 2020/21:

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

"1.1 When you must have traded

You must have traded in the tax years:

• 2019 to 2020 and submitted your tax return on or before 2 March 2021
• 2020 to 2021

You must either:

• be currently trading but are impacted by reduced demand due to coronavirus
• have been trading but are temporarily unable to do so due to coronavirus"

That condition also applied to SEISS 4.

Why did he do no work at all throughout 2020/21?

poppy12345

We weren't in lockdown for the whole of April 20/21 so why didn't he work?

deano888

Thanks for info, He was worried about covid and only started going back after being double vaxed. Seems harsh he will miss out, thought was the whole point of the grant. 

poppy12345

deano888 said:

Thanks for info, He was worried about covid and only started going back after being double vaxed. Seems harsh he will miss out, thought was the whole point of the grant. 

People did work at some point during the year. If he had zero earnings there's nothing to claim..

Jeremy535897

I would be concerned if he has already claimed the first four grants. As I said earlier, SEISS 4 also required him to trade in 2020/21. If he claimed this grant, on the face of it he is likely to have to pay it back. SEISS 1 to 3 required him to intend to continue to trade in 2020/21. That requires him to trade at some point in 2020/21. If he has claimed these grants, he may have to pay them back. He needs to take professional advice. Does he have an accountant?

ChippieSteve

If he has supporting evidence that he had every intention to continue and resume trading, which could be something as simple as being able to show receipts for keeping his taxi road legal and roadworthy, and therefore ready to work, then there is no reason he shouldn't apply for grant 5. He has already stated his zero income for the year, so he's doing nothing fraudulent, it's merely a speculative claim and if HMRC doesn't like it, they will simply deny it with no legal comeback on your dad. No loss, no foul.

Let me put it this way. I had one year during which my self employed income was zero due to severe illness. For one reason and another, I missed the final date for completing the tax return for that year by two weeks, and still got a late return penalty on a year of zero turnover. From that, I surmise that HMRC doesn't equate turnover with employment status. If you're in the system as self employed, then HMRC considers you as such until you inform them otherwise.

Jeremy535897

ChippieSteve said:

If he has supporting evidence that he had every intention to continue and resume trading, which could be something as simple as being able to show receipts for keeping his taxi road legal and roadworthy, and therefore ready to work, then there is no reason he shouldn't apply for grant 5. He has already stated his zero income for the year, so he's doing nothing fraudulent, it's merely a speculative claim and if HMRC doesn't like it, they will simply deny it with no legal comeback on your dad. No loss, no foul.

Let me put it this way. I had one year during which my self employed income was zero due to severe illness. For one reason and another, I missed the final date for completing the tax return for that year by two weeks, and still got a late return penalty on a year of zero turnover. From that, I surmise that HMRC doesn't equate turnover with employment status. If you're in the system as self employed, then HMRC considers you as such until you inform them otherwise.

Unfortunately that is not necessarily correct for SEISS. For example, one trader didn't complete SA103S because turnover was below £1,000, and HMRC took this to mean the trade had ceased, even though it hadn't. 

JJC1956

Jeremy535897 said:

ChippieSteve said:

If he has supporting evidence that he had every intention to continue and resume trading, which could be something as simple as being able to show receipts for keeping his taxi road legal and roadworthy, and therefore ready to work, then there is no reason he shouldn't apply for grant 5. He has already stated his zero income for the year, so he's doing nothing fraudulent, it's merely a speculative claim and if HMRC doesn't like it, they will simply deny it with no legal comeback on your dad. No loss, no foul.

Let me put it this way. I had one year during which my self employed income was zero due to severe illness. For one reason and another, I missed the final date for completing the tax return for that year by two weeks, and still got a late return penalty on a year of zero turnover. From that, I surmise that HMRC doesn't equate turnover with employment status. If you're in the system as self employed, then HMRC considers you as such until you inform them otherwise.

Unfortunately that is not necessarily correct for SEISS. For example, one trader didn't complete SA103S because turnover was below £1,000, and HMRC took this to mean the trade had ceased, even though it hadn't. 

What is the case if you have no income but still have outgoings such as Furloughed staff, Accountancy Fees, Rent etc

Jeremy535897

JJC1956 said:

Jeremy535897 said:

ChippieSteve said:

If he has supporting evidence that he had every intention to continue and resume trading, which could be something as simple as being able to show receipts for keeping his taxi road legal and roadworthy, and therefore ready to work, then there is no reason he shouldn't apply for grant 5. He has already stated his zero income for the year, so he's doing nothing fraudulent, it's merely a speculative claim and if HMRC doesn't like it, they will simply deny it with no legal comeback on your dad. No loss, no foul.

Let me put it this way. I had one year during which my self employed income was zero due to severe illness. For one reason and another, I missed the final date for completing the tax return for that year by two weeks, and still got a late return penalty on a year of zero turnover. From that, I surmise that HMRC doesn't equate turnover with employment status. If you're in the system as self employed, then HMRC considers you as such until you inform them otherwise.

Unfortunately that is not necessarily correct for SEISS. For example, one trader didn't complete SA103S because turnover was below £1,000, and HMRC took this to mean the trade had ceased, even though it hadn't. 

What is the case if you have no income but still have outgoings such as Furloughed staff, Accountancy Fees, Rent etc

We really don't know for sure. Just because you had zero turnover doesn't mean you ceased to trade, although zero income and zero outgoings for a year would be a strong indication that the trade had ceased. If you had ceased to trade, you would not pay staff on furlough but make them redundant. HMRC seem to be taking a very mechanistic view. Ensure you file a SA103 (F or S as appropriate) to record the loss, and be prepared to argue if they say you didn't trade.

JJC1956

Jeremy535897 said:

JJC1956 said:

Jeremy535897 said:

ChippieSteve said:

If he has supporting evidence that he had every intention to continue and resume trading, which could be something as simple as being able to show receipts for keeping his taxi road legal and roadworthy, and therefore ready to work, then there is no reason he shouldn't apply for grant 5. He has already stated his zero income for the year, so he's doing nothing fraudulent, it's merely a speculative claim and if HMRC doesn't like it, they will simply deny it with no legal comeback on your dad. No loss, no foul.

Let me put it this way. I had one year during which my self employed income was zero due to severe illness. For one reason and another, I missed the final date for completing the tax return for that year by two weeks, and still got a late return penalty on a year of zero turnover. From that, I surmise that HMRC doesn't equate turnover with employment status. If you're in the system as self employed, then HMRC considers you as such until you inform them otherwise.

Unfortunately that is not necessarily correct for SEISS. For example, one trader didn't complete SA103S because turnover was below £1,000, and HMRC took this to mean the trade had ceased, even though it hadn't. 

What is the case if you have no income but still have outgoings such as Furloughed staff, Accountancy Fees, Rent etc

We really don't know for sure. Just because you had zero turnover doesn't mean you ceased to trade, although zero income and zero outgoings for a year would be a strong indication that the trade had ceased. If you had ceased to trade, you would not pay staff on furlough but make them redundant. HMRC seem to be taking a very mechanistic view. Ensure you file a SA103 (F or S as appropriate) to record the loss, and be prepared to argue if they say you didn't trade.

I never ceased trading, I lease a property (in-house restaurant) from a University, the Uni closed Mar 20, I have not had to pay rent, I had 4 staff, now I have 2 on Furlough, I also pay accountancy fees (incl PAYE) monthly, (much easier) all of the UNI staff I have talked to are not coming back until Sept, but on reduced days due to WFH. Rumours abound. My accountant sent in all of my annual accounts at the right time obviously showing any outgoings, so apart from SEISS and 1 ARG grant I have no income which is shown on my annual accounts sheet. 0.00