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PostPosted: Wed Jul 21, 2021 7:39 pm 
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Sussex wrote:
For anyone getting confused on what HMRC want in terms of turnover, as opposed to what they have been asking for before i.e. profit, they have done a short YouTube video to help.

https://www.youtube.com/watch?v=pfHgwBqnwfg

But still no clarification about the issue I raised in the other thread about SEISS 5:

In an earlier thread about SEISS 5, StuartW wrote:
But one thing I'm still not entirely clear about is what happens if you prepare your figures for a period which doesn't coincide with the tax year.

My accounts are prepared to 30 November, for example, and it's the turnover figure for that period that's included in my tax return.

But as far as I can make out, the turnover figure for 2020/21 that I'll have to submit will be based on the year from April to April, and that will be compared to the turnover figure on my previous tax return, which is based on the year to 30 November :-s

So they won't be comparing similar time periods in terms of how my turnover has changed between lockdown year and the previous year, which seems a bit odd.


But have searched for clarification on a couple of professional accountants' websites:

Barlow Andrews chartered accountants wrote:
You first need to work out your turnover for a 12 months period from April 2020 to April 2021. The most common and easiest period to look at will be 1/4/2020 to 31/3/2021, but if your accounting period already runs in line with the tax year it will be 6/4/20 to 5/4/2021.[...]

This turnover figure needs to be compared to the turnover reported on your 2019/20 tax return (unless this was not a normal year). You can find this on the return we sent you for approval or on the sole trader or partnership accounts prepared for including in your return. These accounts may not be “April to April” as the turnover calculated above because your accounting period may be different (eg may be 31/7/19 year end), however these are what is included on your tax return and what you should use to compare.

https://barlow-andrews.co.uk/seiss-fift ... lculation/


Elsby & Co taxation advisors wrote:
Forget basis periods and accounting periods, what HMRC wants here is the turnover that fits almost exactly into the tax year 2020/21. This is the gross sales received in a 12-month period that started from 1 April 2020 to 5 April 2020 - essentially the sales recorded in that year.

Where you make up your accounts for any period other than the tax year, this turnover figure will not be the taxable turnover for the tax year 2020/21. However, the HMRC guidance seems deliberately designed to confuse, as it tells you to refer to your 2020/21 self-assessment tax return to find out your turnover figure! [...]

Note the guidance has now switched to looking at turnover for an accounting period not the turnover received in the tax year. For a business that makes up accounts to 30 April, it will compare the sales booked in:

Reference year: 1 May 2018 to 30 April 2019; to
2020/21: 6 April 2020 to 5 April 2021

https://www.elsbyandco.co.uk/the-knowle ... w-revealed

So the turnover figure for the earlier year will be the one submitted on your tax return. But the one for lockdown year (April to April) that you have to submit won't necessarily be the same figure you submit on your tax return that's due before January next year :-s

But, as per the highlighted text in the quote, at least the professionals agree that it's all a wee bit confusing [-(


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PostPosted: Wed Jul 21, 2021 11:07 pm 
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When I asked the HMRC a question on their Forum about my accounting year not being April to April they replied as shown below my question.

My Question was:

"Seiss 5 Application: HMRC states that you must enter your Turnover for two different Tax Years for a comparison on your Turnover loss due to Covid, these must be between April the 1st to 6th for a full 12 months..Eg 2018-2019 or 2019-2020 to compare with 2020-2021, they state you must be precise or it'll show up when you do your next tax return, Thats good and fine, But many business's have a business year that may run form Say July to June or Sept to August.

When the tax returns for unalligned Business years are submitted they don't show an April to April Turnover, my question is how can HMRC ensure that what we enter for April to April matches our 12 business months of Sept to August.

I don't wish to have the HMRC denying me my Seiss 5 because my Annual Business Tax returns do not allign with their April to April tax years even though they are submitted to suit the April Tax year deadlines.

I don't see any way to remedy this


Their reply:

We are aware that the turnover declared for April 2020 – April 2021 will not match the previous September – August turnover due to it being a completely different accounting period.



"For the purposes of the fifth SEISS grant we are comparing the turnover for a 12 month period from April 2020 - April 2021, to a 12 month period as declared on a previous return.



We are aware that not everyone uses April to April as their accounting period, but that is the period we are asking to be used as the 'pandemic year' in determining the effect of COVID-19 on the business against a ‘normal’ year.
"


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PostPosted: Thu Jul 22, 2021 7:14 pm 
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Basically they are saying no matter what your tax year is they want your April 2020 to March 2021 turnover.

If for any reason someone with a different tax year has difficulties with their 2019/2020 tax return, then they can use the 2018/2019 tax return.

_________________
IDFIMH


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PostPosted: Sat Jul 24, 2021 2:05 am 
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Bloodnock wrote:
When I asked the HMRC a question on their Forum about my accounting year not being April to April they replied as shown below my question.

Thanks for posting that. It's pretty straightforward, really, it's just that it was something that wasn't properly explained, although it was an obvious thing that would cause confusion, and would have been quite straightforward to explain it in the first place.

I mean, in the video Sussex posted, at one point it was specifically stated that the figure they require for lockdown year turnover would be the figure that would eventually go on your tax return. Wrong - it could be the figure, but only if you prepare accounts with a year end coinciding with the year they want you to use for lockdown turnover. (The video now seems to be marked unavailable/private - maybe they've done another one.)

But I think that's why they're allowing claimants to use a year starting any day from 1 April to 6 April 2020 for your lockdown turnover figure. 1 April is convenient if you prepare monthly figures, while 6 April is convenient if you prepare accounts for the year ending 5 April to coincide with the end of the tax year.


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PostPosted: Sat Jul 24, 2021 2:06 am 
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Incidentally, the tax year never changes - it always starts on 6 April and ends on 5 April.

What does differ between individuals is the basis period used to assess your tax liablity for a particular tax year.

The simple rule is that it's the accounting period ending during the tax year that's used to calculate your tax liability.

So my accounts are prepared for the year end 30 November. Thus for tax year 2020-21 it's the year ended 30 November 2020 that's used to assess my tax liablity. So although it's used to calculate my tax liability for the year from 6 April to 5 April, the actual profit figures used arise partly in the previous tax year :-s

But for tax year 2020-21, for those preparing annual accounts the basis period could be anything from the year ended 30 April 2020 to the year ended 31 March 2021 (assuming year ends arising at the end of a month).

But which is why some people prepare accounts with a year end of 5 April - that way the basis period exactly coincides with the tax year =D> :roll:


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PostPosted: Sat Jul 24, 2021 11:18 am 
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My next tax assessment in 31st January 2022 will cover my accounting year from 31st July 2019 to 1st June 2020 and my July 2020 to June 2021 accounting period will not on my tax assessment until its submission by 31st January 2023.....This time lag started 20 years ago because I started trading in June 2000 and that single month was added to my 2001-2002 tax year and it has created a 12 tax assessment month time lag ever since.

My accountant says that the HMRC will check my Seiss claim figures only after they have the true April 21 to April 22 figures they use based on both my 2019/20 and 2020/21 assessments.


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PostPosted: Mon Jul 26, 2021 2:32 am 
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Yes, it's all a bit bonkers, but of course anyone waiting until the last minute in submitting their tax returns will make estimated payments during the relevant tax year, and this will be adjusted when the final figures are known.

If I wait until January 2022 to submit my 2020-21 tax return it'll be based on the figures for the financial year ending 30 November 2020, so in theory I could have my figures ready around 13 months or so before they're actually submitted 8-[


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