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SEISS fifth grant
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Author:  StuartW [ Wed Jul 07, 2021 4:29 pm ]
Post subject:  SEISS fifth grant
No doubt many will be aware that HMRC have published the details of the fifth SEISS fifth grant, which can be claimed from the end of this month, and covers May to September 2021. To qualify you must suffer a 'significant reduction' in your *profits* during that period.

That's certainly the case for me, but in view of all the claims etc about excessive customer waiting times for cars, presumably HMRC will see that as meaning some drivers are doing rather well, or at least profits aren't 'significantly reduced'.

Anyway, assuming your profits are 'significantly reduced' during the current five month period, of course the big difference with SEISS this time is that the amount you get depends on how much your *turnover* decreased in the year from April 2020 to April 2021 (lockdown year, effectively).

This is compared to a previous year, either 2018/19 or 2019/20.

If your turnover has decreased more than 30%, you'll get the same grant as the last one, thus at the rate of 80% of profits (as far as I can see).

If turnover has decreased less than 30%, you'll only get a 30% grant, as compared to the previous 80% rate.

But to tie up a couple of queries from the previous thread, it seems that it's not just a box-ticking exercise to compare your turnover between the two years, and you have to provide HMRC with a turnover figure for 2020/21. This is then compared to one of the previous years.

The comparison figure for 2019/20 or 2018/19 will just be the turnover figure that you've already submitted on your tax return, as far as I can tell.

Of course, the 2020/21 figure isn't due to be submitted until January 2022, so if you haven't completed your tax return 2020/21 tax return yet then you're required to submit a turnover figure from your records, for example accounting books or spreadsheets.

So essentially it's just the kind of information you'd need to complete your tax return due in January 2022 anyway, so shouldn't be particularly difficult.

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 if your tax return is based on the tax year then it won't make any difference - the turnover figure you'll have to submit soon to claim SEISS 5 will be the same one that will go on your 2020/21 tax return.

Anyway, this is the main HMRC page, and the second link is specifically about how you calculate your turnover for April 2020-April 2021.

https://www.gov.uk/guidance/claim-a-gra ... ort-scheme

https://www.gov.uk/guidance/work-out-yo ... eiss-grant
Author:  Sussex [ Wed Jul 07, 2021 6:22 pm ]
Post subject:  Re: SEISS fifth grant
Quote:
That's certainly the case for me, but in view of all the claims etc about excessive customer waiting times for cars, presumably HMRC will see that as meaning some drivers are doing rather well, or at least profits aren't 'significantly reduced'.

Will the current (if it actually exists in places) excessive demand really matter?

The comparison will be between the 20/21 period and the years prior to that. So any demand from April 2021 is irrelevant.
Author:  StuartW [ Thu Jul 08, 2021 1:15 am ]
Post subject:  Re: SEISS fifth grant
Correct me if I'm wrong, but the forthcoming fifth grant is supposed to cover the *current* five month period, from May to September 2021.

During this time you must suffer a 'significant reduction' in profits to qualify for the grant. (And although I can't find it stated anywhere, it's presumably a reduction from pre-Covid levels rather than a significant reduction from the same period last year.)

So if the claims now being made about drivers run off their feet are correct, then presumably they've not suffered a signficant reduction in profits. In fact, presumably their profits have *increased* since before Covid :-o

But assuming you're suffering a significant reduction in profits at the moment, and for the period May to September 2021, how much you get as a grant depends on how much your turnover dropped between the pre-Covid year and the main lockdown year, roughly speaking. So it's comparing your turnover from April 2020 to April 2021 to the previous year.

So it's all a bit daft and illogical really, but them's the rules 8-[

But, simply speaking, you could have been totally wiped out during lockdown year, but if you're back to normal now and for the period from May to September this year, then you don't qualify for the fifth grant [-(
Author:  heathcote [ Thu Jul 08, 2021 1:20 am ]
Post subject:  Re: SEISS fifth grant
Do not qualify for any of the SEISS grants.
Author:  MR T [ Thu Jul 08, 2021 11:03 am ]
Post subject:  Re: SEISS fifth grant
=D> =D>
Author:  MR T [ Thu Jul 08, 2021 11:05 am ]
Post subject:  Re: SEISS fifth grant
StuartW wrote:
Correct me if I'm wrong, but the forthcoming fifth grant is supposed to cover the *current* five month period, from May to September 2021.

During this time you must suffer a 'significant reduction' in profits to qualify for the grant. (And although I can't find it stated anywhere, it's presumably a reduction from pre-Covid levels rather than a significant reduction from the same period last year.)

So if the claims now being made about drivers run off their feet are correct, then presumalby they've not suffered a signficant reduction in profits. In fact, presumably their profits have *increased* since before Covid :-o

But assuming you're suffering a significant reduction in profits at the moment, and for the period May to September 2021, how much you get as a grant depends on how much your turnover dropped between the pre-Covid year and the main lockdown year, roughly speaking. So it's comparing your turnover from April 2020 to April 2021 to the previous year.

So it's all a bit daft and illogical really, but them's the rules 8-[

But, simply speaking, you could have been totally wiped out during lockdown year, but if you're back to normal now and for the period from May to September this year, then you don't qualify for the fifth grant [-(

And don't forget if you have casted in any pension policies that were eligible for tax
Author:  Sussex [ Thu Jul 08, 2021 5:20 pm ]
Post subject:  Re: SEISS fifth grant
Quote:
Correct me if I'm wrong, but the forthcoming fifth grant is supposed to cover the *current* five month period, from May to September 2021.

But that means claimants would be guessing what their turnover would be for at least two of those months?
Author:  Sussex [ Thu Jul 08, 2021 5:24 pm ]
Post subject:  Re: SEISS fifth grant
Quote:
So if the claims now being made about drivers run off their feet are correct, then presumalby they've not suffered a signficant reduction in profits. In fact, presumably their profits have *increased* since before Covid :-o

Not sure I've seen too many articles about drivers being run off their feet, more operators claiming ( :---) ) that they haven't got enough drivers to meet demand.
Author:  StuartW [ Fri Jul 09, 2021 8:01 am ]
Post subject:  Re: SEISS fifth grant
Sussex wrote:
Quote:
Correct me if I'm wrong, but the forthcoming fifth grant is supposed to cover the *current* five month period, from May to September 2021.

But that means claimants would be guessing what their turnover would be for at least two of those months?

Correct me if I'm wrong, but hasn't that been the case for previous grants? Or at least a broadly similar if not identical test.

Maybe the difference is that for many it will be less clear cut now, particularly with all these drivers run off their feet 8-[

Seriously, though, the relevant phrase is perhaps that you have to have a 'reasonable belief' that you'll suffer a 'signficant reduction' in profits from May to September, so it's basically about acting in good faith and making reasonable assumptions.

The detailed HMRC blurb is as follows:

HMRC wrote:
Reasonable belief

You must reasonably believe that you’ll suffer a significant reduction in trading profits due to reduced business activity, capacity, demand or inability to trade due to COVID-19- between 1 May 2021 and 30 September 2021. You must keep evidence that shows how your business has been impacted by COVID-19 resulting in less business activity than otherwise expected.

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

And the other main test in this regard is 'significant reduction':

HMRC wrote:
Significant reduction

Before you make a claim, you must decide if the impact on your business between 1 May 2021 and 30 September 2021 will cause a significant reduction in your trading profits for the tax year you report them in.

HMRC cannot make this decision for you because your individual and wider business circumstances will need to be considered when deciding if the reduction is significant.

You should wait until you have a reasonable belief that your trading profits are going to be significantly reduced, before you make your claim.

You do not have to consider any other COVID-19 scheme support payments that you have received when deciding if you’ve had a significant reduction in your trading profits.

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

So it's all a bit wooly in some ways, but of course I suspect many of us will consider it pretty clear cut by the end of this month (ie covering the first three months of the relevant five month period) that profits will be 'significantly reduced' over the five months ending September 2021, unless some minor miracle happens during the last two months. To that degree we would hold a 'reasonable belief'.

But of course, for some it may not be so clear cut, and indeed in such circumstances Money Saving Expert suggests waiting until nearer the end of the period before claiming - you can claim the fifth grant up to 30 September:

Money Saving Expert wrote:
You need to believe the impact during this period WILL cause a 'significant reduction' in trading profits

Before you claim, you must decide if the impact on your business will cause a "significant reduction" in your trading profits.

For many this will be straightforward, but others might not yet be sure. If this is you, you might need to wait until you have a "reasonable belief" that your trading profits are going to be significantly reduced before you know if you can make a claim.

Only you can decide what is a "significant reduction" in your trading profits – it very much depends on your business. HMRC says it "cannot make this decision for you because your individual and wider business circumstances will need to be considered when deciding whether the reduction is significant".

You must keep evidence that shows how your business has been affected by coronavirus resulting in less business activity than usual.

If your business recovers after you've claimed, don't worry. Your eligibility will not be affected as this is based on your "reasonable belief" that your trading profits would have been significantly reduced at the time you made your claim.

And that last point is particularly interesting - even if you had a bad May, June and July, but made up for it in August and September, it wouldn't affect your claim because you had a 'reasonable belief' at the time you claimed.

Anyway, for drivers in Scotland at least claiming at the end of this month, with regards to having a reasonable believe about August and September, it'll help that 'freedom day' is likely to be a couple of months at least behind England, and I suspect the lockdown regime here will be a bit stricter than England's for quite a few months to come yet :?
Author:  StuartW [ Fri Jul 09, 2021 8:05 am ]
Post subject:  Re: SEISS fifth grant
Sussex wrote:
Quote:
So if the claims now being made about drivers run off their feet are correct, then presumably they've not suffered a signficant reduction in profits. In fact, presumably their profits have *increased* since before Covid :-o

Not sure I've seen too many articles about drivers being run off their feet, more operators claiming ( :---) ) that they haven't got enough drivers to meet demand.

Indeed, but certainly fairly plausible claims about longer than normal waiting times for customers, and some incidents of abuse as a consequence. So to that extent it's reasonable to assume that drivers are at least as busy as usual.

Or at least that's how a casual reader or the likes of HMRC might interpret such reports. Of course, I'm taking it all with a pinch of salt. If there's been any such problems here (with pre-booked work if not on the ranks) then in large part it'll be due to all premises serving alcohol having to close at 11pm, while previously the restuarants might close then, but the pubs would generally be open until at least midnight, with the latest licensed premises closing at 2am.

So essentially demand is very peaked at around 11pm, and isn't spread over several hours as previously. So to that extent if there's any undersupply here it's not consistent with drivers earning more or even the same as previously, because almost all of us are home by around midnight, while previously there would still be two or three hours of work left.

So I'm being a bit tongue-in-cheek about drivers being 'run off their feet', but just making the point that if it *is* true and it *is* a credible comparison with the pre-lockdown scenario, then to that extent drivers might not be eligible for SEISS 5 :?
Author:  bloodnock [ Fri Jul 09, 2021 11:39 am ]
Post subject:  Re: SEISS fifth grant
By working on a May to September guestimate of Business turnover threshold it creates a scenario where if your close to reaching more than a 30% reduction in trade that youd be as as well to slacken off on your work load to gain the full 5th Seiss grant otherwise you will be be working more for less money and with it incur additional overheads....flip slightly over the threshold and it could cost you £1000s...And Taxi Owners aint daft.
Author:  StuartW [ Fri Jul 09, 2021 11:54 am ]
Post subject:  Re: SEISS fifth grant
Indeed you're right that there's maybe a perverse incentive *not* to work, particularly in something like cab driving, if in doing so it might mean you don't qualify for the grant. It's a bit like the age-old benefits trap, where working makes you worse off, or little better off, than on benefits.

But that kind of thing has been an issue since the first SEISS grant, effectively, although the tests applied to qualify for the grant have changed slightly since the first one.

But the 30% drop in *turnover* isn't relevant - that's about what's happened already, so there's no perverse incentive in that regard.

But what 'significant reduction in profits' for the current five month period means in terms of numbers is anyone's guess :?
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