How impacted does your business need to be in recent months to get fifth grant?

textbook

My turnover is down for last year so im eligible for fifth grant but watching the video on it, it says you need to have been impacted from May 2021 to Sep 2021 (this year) .   How much does your profit or turnover need to be down in this period to get it?   Are they investigating people?

Jeremy535897

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

The change in turnover determines whether the grant is payable at 80% or 30%. It's not a condition of eligibility.

textbook

This bit concerns me-

reasonably believe there will be a significant reduction in your trading profits due to the impact of COVID-19 between 1 May 2021 and 30 September 2021.

I guess compared to normal years.  I guess I'll have to work out how much Ive pulled in.  I suspect profit is down, but not sure if it's significantly down (without a percentage it's subjective anyhow).   I guess claim it and then I'll just have to pay it back if it's not deemed significant reduction.  I'll print off my bank statements to get an idea

goodfella66

textbook said:

This bit concerns me-

reasonably believe there will be a significant reduction in your trading profits due to the impact of COVID-19 between 1 May 2021 and 30 September 2021.

I guess compared to normal years.  I guess I'll have to work out how much Ive pulled in.  I suspect profit is down, but not sure if it's significantly down (without a percentage it's subjective anyhow).   I guess claim it and then I'll just have to pay it back if it's not deemed significant reduction.  I'll print off my bank statements to get an idea

That is the bit that worries me. How can you prove that your profits are down and it is caused by Covid. My profits are down. I think Covid has definitely played a part in the reason, but if HMRC start knocking, how can you prove it?

sheramber

details here
https://www.gov.uk/guidance/how-your-trading-conditions-affect-your-eligibility-for-the-self-employment-income-support-scheme

Pennywise

goodfella66 said:

textbook said:

This bit concerns me-

reasonably believe there will be a significant reduction in your trading profits due to the impact of COVID-19 between 1 May 2021 and 30 September 2021.

I guess compared to normal years.  I guess I'll have to work out how much Ive pulled in.  I suspect profit is down, but not sure if it's significantly down (without a percentage it's subjective anyhow).   I guess claim it and then I'll just have to pay it back if it's not deemed significant reduction.  I'll print off my bank statements to get an idea

That is the bit that worries me. How can you prove that your profits are down and it is caused by Covid. My profits are down. I think Covid has definitely played a part in the reason, but if HMRC start knocking, how can you prove it?

The starting point is that you have to be clear in your own mind that profits are down because of covid related issues.  You must know the reasons why your profit is reduced.  So if you've done nothing else different, then covid is almost certainly the reason.  Should HMRC open an enquiry, the starting point is the same.  You tell them why you believe that it's covid and only covid that has caused reduced profits.  It's up to the HMRC inspector whether they take that at face value or whether they want to delve deeper. I would imagine that initially they'll apply a basic common sense approach - i.e. look at what your business does - similar businesses will be affected in similar ways, so they have a idea for most common types of business how they've been affected.

As for evidence, that depends on the reasons you give for the reduction in profit.  If it's a supply chain problem, then presumably you have emails between you and your supplier confirming shortages or delivery delays.  If it's customers delaying you, then, again, you'll probably have emails from customers discussing deferring the work.  If it's lockdowns then you have all the necessary rules/laws from the gov.uk confirming you weren't able to trade.  They may also look into how much effort you've put in to trading, i.e. compare your advertising/marketing costs over that period (compared to normal non covid periods) to check that you were actively looking for business.  They may also check employment records to check that you weren't working elsewhere which could mean you weren't spending as much time on the business.  A lot of businesses have been busier than normal over the Summer due to the ending of lockdowns, some people having more money to spend, some people holidaying in the UK, etc., so HMRC will have an idea of business types which will have benefited from the ending of covid restrictions and therefore which shouldn't generally be claiming the fifth grant.

No one really knows how far they'll go.  I suspect any checks will be pretty superficial and they'll be happy with any reasonable/believable explanation.

textbook

Pennywise said:

goodfella66 said:

textbook said:

This bit concerns me-

reasonably believe there will be a significant reduction in your trading profits due to the impact of COVID-19 between 1 May 2021 and 30 September 2021.

I guess compared to normal years.  I guess I'll have to work out how much Ive pulled in.  I suspect profit is down, but not sure if it's significantly down (without a percentage it's subjective anyhow).   I guess claim it and then I'll just have to pay it back if it's not deemed significant reduction.  I'll print off my bank statements to get an idea

That is the bit that worries me. How can you prove that your profits are down and it is caused by Covid. My profits are down. I think Covid has definitely played a part in the reason, but if HMRC start knocking, how can you prove it?

The starting point is that you have to be clear in your own mind that profits are down because of covid related issues.  You must know the reasons why your profit is reduced.  So if you've done nothing else different, then covid is almost certainly the reason.  Should HMRC open an enquiry, the starting point is the same.  You tell them why you believe that it's covid and only covid that has caused reduced profits.  It's up to the HMRC inspector whether they take that at face value or whether they want to delve deeper. I would imagine that initially they'll apply a basic common sense approach - i.e. look at what your business does - similar businesses will be affected in similar ways, so they have a idea for most common types of business how they've been affected.

As for evidence, that depends on the reasons you give for the reduction in profit.  If it's a supply chain problem, then presumably you have emails between you and your supplier confirming shortages or delivery delays.  If it's customers delaying you, then, again, you'll probably have emails from customers discussing deferring the work.  If it's lockdowns then you have all the necessary rules/laws from the gov.uk confirming you weren't able to trade.  They may also look into how much effort you've put in to trading, i.e. compare your advertising/marketing costs over that period (compared to normal non covid periods) to check that you were actively looking for business.  They may also check employment records to check that you weren't working elsewhere which could mean you weren't spending as much time on the business.  A lot of businesses have been busier than normal over the Summer due to the ending of lockdowns, some people having more money to spend, some people holidaying in the UK, etc., so HMRC will have an idea of business types which will have benefited from the ending of covid restrictions and therefore which shouldn't generally be claiming the fifth grant.

No one really knows how far they'll go.  I suspect any checks will be pretty superficial and they'll be happy with any reasonable/believable explanation.

Pennywise said:

goodfella66 said:

textbook said:

This bit concerns me-

reasonably believe there will be a significant reduction in your trading profits due to the impact of COVID-19 between 1 May 2021 and 30 September 2021.

I guess compared to normal years.  I guess I'll have to work out how much Ive pulled in.  I suspect profit is down, but not sure if it's significantly down (without a percentage it's subjective anyhow).   I guess claim it and then I'll just have to pay it back if it's not deemed significant reduction.  I'll print off my bank statements to get an idea

That is the bit that worries me. How can you prove that your profits are down and it is caused by Covid. My profits are down. I think Covid has definitely played a part in the reason, but if HMRC start knocking, how can you prove it?

The starting point is that you have to be clear in your own mind that profits are down because of covid related issues.  You must know the reasons why your profit is reduced.  So if you've done nothing else different, then covid is almost certainly the reason.  Should HMRC open an enquiry, the starting point is the same.  You tell them why you believe that it's covid and only covid that has caused reduced profits.  It's up to the HMRC inspector whether they take that at face value or whether they want to delve deeper. I would imagine that initially they'll apply a basic common sense approach - i.e. look at what your business does - similar businesses will be affected in similar ways, so they have a idea for most common types of business how they've been affected.

As for evidence, that depends on the reasons you give for the reduction in profit.  If it's a supply chain problem, then presumably you have emails between you and your supplier confirming shortages or delivery delays.  If it's customers delaying you, then, again, you'll probably have emails from customers discussing deferring the work.  If it's lockdowns then you have all the necessary rules/laws from the gov.uk confirming you weren't able to trade.  They may also look into how much effort you've put in to trading, i.e. compare your advertising/marketing costs over that period (compared to normal non covid periods) to check that you were actively looking for business.  They may also check employment records to check that you weren't working elsewhere which could mean you weren't spending as much time on the business.  A lot of businesses have been busier than normal over the Summer due to the ending of lockdowns, some people having more money to spend, some people holidaying in the UK, etc., so HMRC will have an idea of business types which will have benefited from the ending of covid restrictions and therefore which shouldn't generally be claiming the fifth grant.

No one really knows how far they'll go.  I suspect any checks will be pretty superficial and they'll be happy with any reasonable/believable explanation.

thanks.   I have no direct emails caused by covid i dont think but profits are down and figure e.g. turnover down from normal year meant I applied and qualified for 80% grant -£1600.   People in my industry haven't been down over last few months so maybe I shouldn't have applied I dont no.  I have customers with covid who haven't let me inside but ive worked outside so not an issue.   All previous grants I had emails or texts relating to covid evidence like I was isolating but nothing for last few months.  Oh well I guess if they arent happy I'll pay back the £1600

textbook

goodfella66 said:

textbook said:

This bit concerns me-

reasonably believe there will be a significant reduction in your trading profits due to the impact of COVID-19 between 1 May 2021 and 30 September 2021.

I guess compared to normal years.  I guess I'll have to work out how much Ive pulled in.  I suspect profit is down, but not sure if it's significantly down (without a percentage it's subjective anyhow).   I guess claim it and then I'll just have to pay it back if it's not deemed significant reduction.  I'll print off my bank statements to get an idea

That is the bit that worries me. How can you prove that your profits are down and it is caused by Covid. My profits are down. I think Covid has definitely played a part in the reason, but if HMRC start knocking, how can you prove it?

goodfella66 said:

textbook said:

This bit concerns me-

reasonably believe there will be a significant reduction in your trading profits due to the impact of COVID-19 between 1 May 2021 and 30 September 2021.

I guess compared to normal years.  I guess I'll have to work out how much Ive pulled in.  I suspect profit is down, but not sure if it's significantly down (without a percentage it's subjective anyhow).   I guess claim it and then I'll just have to pay it back if it's not deemed significant reduction.  I'll print off my bank statements to get an idea

That is the bit that worries me. How can you prove that your profits are down and it is caused by Covid. My profits are down. I think Covid has definitely played a part in the reason, but if HMRC start knocking, how can you prove it?

What's the penalty?  I get £1600 (80%) will we just pay it back or constant harrassment for years e.g.when they suspect someone has been doing tax fraud?   My turnover down 30%, my profits down although not massively.   

Jeremy535897

HMRC explain the rules in detail here:

https://www.gov.uk/guidance/how-your-trading-conditions-affect-your-eligibility-for-the-self-employment-income-support-scheme

Note the following:

"HMRC expects you to make an honest assessment about whether you reasonably believe your business will have a significant reduction in profits."

You must have gone through a thought process in deciding whether to claim. Write it down. Include any evidence, and the relevant figures. You may not remember it if they do ask in a year's time.

I would be surprised if HMRC try to tackle lots of people where there is a slight question over the choice they made. They will tackle the easy cases first (as they did when people declared they ceased to trade in 2019/20, for example, when it was a condition of claiming that they intended to continue to trade in 2020/21). I suspect it will only be cases where the claim clearly could not be justified when it was made that attract any tougher sanction than paying the grant back plus possibly interest.

Turnover change only determines the level of the grant, not eligibility.