Taxi Driver Online

Mine said from the 30th November.

Just hope there's some money left after you have had your fill.

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IDFIMH

I'm sure my meagre amount will leave plenty behind for the rest of you.

Can't fault HMRC....Grant money in bank this morning..phewwww.

An accountant friend said an interesting thing to me today with regards these Seiss grants, they told me to be careful should I go over my 3 years average gross income with the additional income from accepting these grants.

Due to us having a school contract which was paid in full and the grant money added to the other lean fare pickings combined with lower business expenses due to less vehicle milages our Gross profits could be higher than the lack of business would suggest! this could be Interpreted by HMRC as a breach of the Seiss grant declaration where you state your income has suffered due lack of work.

It wouldnt be to hard to do as there were purchases of new vehicles during those three years which had the effect of lowering the gross incomes during the three years the seiss grants were based on.

Seems a rotten system when your penalised for accepting the Seiss grants which are meant to protect your income and livelyhood.

Has anyone else heard of this scenario?

Don't see that that's relevant at all - your eligibility for the grant doesn't include the grant itself. As I said at the kick off, you could suffer only a slight drop in income, but receive the full grant, so you'd be quids in.

But unlikely for any driver not to have suffered a drop in income due to Covid - perhaps maybe a driver almost wholly reliant on contracts, which weren't affected by lockdown, but that would only be a small minority.

A lot of drivers in the trade will obviously get a lot of their money from contacts that would have carried on regardless, but the vast majority would have been affected due to decreased demand more generally.

But I daresay quite a few in the trade will be better off after receiving the grant, assuming their taxi takings didn't suffer too much, but that's not relevant to whether they're eligible for the grant in the first place.

What your accountant was maybe saying is that because the grants are taxable, then you could well end up with more taxable income than you would if things had carried on as normal. But I can't see how that would affect your eligibility for the grant in the first place.

HMRC has certainly tightened up the eligibility criteria a bit, but basically the test seems to be that Covid has *significantly* reduced *trading* profits.

But the SEISS grant award won't be counted towards your *trading* profits. *Taxable* profits, yes, but not *trading* profits.

If the grant itself had been relevant to whether or not you received it in the first place, it would make everything very complicated. And we would have heard about it by now. Except we haven't. Until now

Anyway, there's stuff on the link below about how trading conditions affect your eligibility for the grants, but for the vast majority of people in the trade it's pretty straightforward as far as I can see. There are several examples on the page about cafe owners, builders, plasterers and hairdressers etc, so easy enough to apply the examples to the trade.

https://www.gov.uk/guidance/how-your-tr ... ort-scheme

the grant counts towards your turnover so if it means you made more money you'll just have to pay a bit more back in tax

well that's my understanding of it anyway

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Taxis Are Public Transport too

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I think if you only do contract work, and that contract work has remained static since March 2020, then the advice Mr Bloodnook received would apply to you, as clearly you have suffered no loss of business.

However for the other 99.99% of us it will not apply.

Even if the vast majority of work you do is contract work, most of us will have had reduced demand from what I call normal taxi/PH work.

So in effect your turnover this year could still be more than the previous year, but you would still be entitled to receive the SEISS grants.

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IDFIMH

'Turnover' including the grants, presumably?

Yes, but I don't know if 'turnover' is the best word for that. Maybe something less precise, like 'total income'. Or, in this context, 'taxable income', which is what it's all about here.

Problem with the word 'turnover' is that it sounds too much like income from trading, which strictly speaking I don't think it is if you're including the grant money.

Which comes back to HMRC's eligibilty criteria - significantly reduced *trading* profits, which seems more about turnover, thus excluding the SEISS grants.

But all this kind of stuff reminds me of what I said months ago when all this kicked off, about words like that meaning different things to different people, like 'net income' and 'net profit'. Words in some contexts mean different things in other contexts.

viewtopic.php?f=2&t=35595&p=399235#p399235

It's a bit like the word 'taxi', which most on here will give a very specific meaning. On the other hand, in the likes of press reporting, obviously 'taxi' means something a bit broader

And another one in the financial context that I keep banging on about - when drivers say they 'make' £100 a shift, I'm quite sure they'll mean that's their income from fares rather than profit, while I think most members of the public would probably think of it more in terms of a profit figure.

Which is why I'd never say that I 'made' £50 on a shift, for example. I'd say my 'takings' were £50, or whatever.

Not necessarily.

Without looking back the grant is all about loss of demand/work, not turnover.

So turnover could improve, but if demand/work is down during the period then you can still apply.

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IDFIMH

I don't contract do work only, it is just a smaller part of my income, but it has severely impacted my business as less than half my income came from that contract, the other 60% of my general PH Income/work disappeared almost enirely.

That said, I still fully qualified for the Seiss grant because my business suffered a loss of income due to Covid, I also had to self shield for 12 weeks so receiving the seiss is not the problem.....it's just if I made more profit than my 3 year average would it be potential but unlikely issue.

Anyhoos...............the Total of the Grants and the Gross Profit from my Contracts after expenses will still leave me well short of my average income, I was just saying that to some it could be a problem later on.

This might shine some light on it.

https://www.accountingweb.co.uk/tax/hmrc-policy/new-seiss-conditions-may-trip-up-taxpayers?



I also did a bit of digging on the HMRC site and found this from an HMRC Admin advisor on its customer advice forum:


"Posted 6 days ago by HMRC Admin 14;


David, When considering your eligibility for the third instalment, any amounts previously received from the first and second instalments would NOT be considered as trading profits.


Reply:


Posted 6 days ago by susan h*****on


Thank you HMRC Admin 14 for finally answering this".


In light of this it would seem that due to Seiss grant money you can't be penalised for inadvertently going over your three year average gross trading profit and they appear to use that as their benchmark rather as average gross income...would you agree?

As regards eligiblity for the grants, just completely ignore the grants themselves. It's that simple.

The accountancy article you posted is really just a rehash of the HMRC page I linked to last night, so probably just as well to read the HMRC page directly.

Technically you're correct, but the way you used 'turnover' earlier didn't seem to construe it in that way, because the other stuff you cited didn't seem to result in an increase in 'turnover', unless the SEISS grant was included

But you're right in that turnover could theoretically improve, but at the same time demand has decreased, but result in lost of profitabilty, and I think the latter is the crux of HMRC's definition. On the other hand, find it difficult to imagine many people in the trade increasing turnover while at the same time suffering decreased demand and lost profit due to Covid. That would really entail an increase in income from fares/contract prices, which seems unlikely. For us, it's more a technical argument with little real relevance as regards whether we qualify.

https://www.gov.uk/guidance/how-your-tr ... ort-scheme

But basically for us it's just a question of reduced demand, which will almost certainly mean reduced turnover (note that HMRC doesn't use the word 'turnover').

But the most important test is that you should reasonably believe that it results in a *signficant reduction* in trading profits. Personally, I think the most uncertain thing here is what amounts to a SIGNIFICANT reduction.

Which I suspect is maybe trying to deter those who I mentioned back when it all kicked off, who may have just suffered a tiny reduction in profits, but would still be eligible for the whole SEISS whack.

So maybe if your profit had just reduced by 2%, then you could cop the lot. And 2% to me doesn't seem like a SIGNIFICANT reduction, so maybe that's the kind of claimants HMRC wants to deter.

But a word like 'significant' is very wooly, and open to all sort of interpretations. 30% reduction would be a significant reduction in my opinion, but 3% wouldn't. Something like 8%, who knows? But it's not me who has to interpret this. Who knows, it could end up in the courts.

See the Chancellor has extended the furlough scheme for another month until April.

Now we don't have a clue what % we will get, or when we will get it, but at least we will get something.

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IDFIMH