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Advising a client re SEISS

Adversely affected - is this before or after other grants?

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When a self employed person is assessing whether they have been adversely affected by Covid then is this before or after the various grants?

A client (partnership with two partners) has been forced to close. They have furloughed staff (at 100% and received 80%) and as a hospitality business has also received a £25k grant. They say their turnover has not gone down as they are delivering (but their margins are very small as using Deliveroo etc) and, due to the grants, their profit is not yet down.

They don't think they have been adversely affected for the purposes of the SEISS claim but have asked for my advice. What would other advisers do - would you just leave the decision to the client? I may wait until we have the end of May figures but do I take out the grants to see if profits are down?

It would be hard to argue that a business forced to close due to Covid is not adversely affected but, while it is nice to have a moral client, I don't want to be the decision maker here.

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By Wanderer
15th May 2020 19:06

Problem is Matrix that 'adversely affected' isn't defined in the regulations, despite the term being included three times.

The underlying presumption in your example is that this relates to profitability / cash flow or similar. Personally I'm not convinced that this is necessarily the case.

The very fact that they have been forced to close is probably sufficient to justify that they have been adversely affected.

Ultimately it's a decision for them as they have to complete the declaration.

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By SteveOH
16th May 2020 11:45

As Wanderer has stated, the term "adversely affected" has not been defined. It has been mentioned, however, that it doesn't simply relate to lost revenue. The fact that your client has had to close their business is, in my view, definitely an argument that they have been adversely affected.

That they have adapted to the situation by increasing their takeaway service is all credit to them; albeit at lower margins. In addition, I don't think that the question of grants comes into play here.

I say, go for it.

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By pauld
16th May 2020 12:25

If closing is not being adversely affected then I don't know what is.

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By Wanderer
16th May 2020 18:55

Here's an indication given by HMRC:-

HMRC wrote:
You should also keep any evidence that your business has been adversely affected by coronavirus such as:

o business accounts showing a reduction in turnover
o confirmation of any coronavirus-related business loans you have received
o dates your business had to close due to lockdown restrictions
o dates you or your staff were unable to work due to coronavirus symptoms, shielding or caring responsibilities due to school closures

The third bullet point seems relevant to your client.
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By Matrix
17th May 2020 12:41

Thanks all, I will have a chat with the client. He may not need the money now but this may be the only help for the self employed and they may never reopen.

All the news articles about how immoral it is for the rich to claim may have resulted in some eligible taxpayers being over cautious.

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