Client's figures are as follows:
2016/17 - First year of trade
Self employment - £2,818
PAYE - £10,164
Self employment - £8,886
Self Employment profit -£0. Client actually made a trading profit but this was wiped out by a large capital purchase in the year to create a small loss of £2,000
On the surface he seems to meet the conditions, just over 50% of his income is from self employment over the 3 years in full. The only reason I can think they're rejected him is that instead of treating 2018/19 as nil, they're deducting the loss from his self-employed income over the three years, reaching a total which is less than 50% of his total income over the three years and then declaring that he doesn't qualify. Is this how it works? I was not under the impression that we had to take losses into account when calculating the 50% income total and it seems particularly perverse in this case given he made a trading profit and only has a taxable loss because he bought equipment.