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Retrospectively reviewing SEISS eligibility

How do you know whether a client was eligible?

Didn't find your answer?

I suspect like many others, having finally seen the end of the furlough claims and their ever changing rules, I am now pulling my hair out trying to retrospectively understand the shifting goalposts of the various SEISS grants.

I understand that as a professional, I need to have some comfort that my clients were eligible for the SEISS grants that they claimed before completing the SEISS section on the SATR.  What would be really helpful would be to see the pages that my clients clicked through and the questions they answered when making their claims - the stuff I was specifically exluded from at the time.  Is this available anywhere?  Google isn't helping!!

The tax return I'm in the middle of is for a client who, in 2019/20, worked in a shop on a self employed basis and sold a few items in the shop.  She purchased the shop in February 2020 with a view to working in the shop full time.  When considering the impact of Corona Virus, am I looking at her self employed income or the expected shop trade (bearing in mind I do not have access to the shop's prior year trading figures).

SEISS 1 is easy - the shop was shut so she was struggling whichever comparison you go with.  But after that, does she need evidence that the shop was doing less trade because of CV, or that she was personally doing less trade?  Or, was she ineligible because she, sort of, changed trade - even though she was working in the same shop albeit now as the proprietor.

How are people broaching this with their clients?  If I had the questions, it would be straightforward to walk through how she answered them and agree whether what she put was / wasn't reasonable.  But I'm just wondering about in the dark here!!  Trying to find answers takes so long, and it's not time that can be added to her bill which is more unpaid CV work!!

Any help much appreciated.

 

Replies (28)

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By GHarr497688
24th Nov 2021 13:33

The client understands their own business more than you. You are not required to be judge and jury and you are not required to be a Tax Inspector or similar. As such I don't believe your work requires you to advise clients on if a claim should or should not be paid back unless something very obvious comes to light like a business claiming when they have ceased to trade prior to the Coronavirus pandemic. I am worried that you think you have such power.

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Replying to GHarr497688:
RLI
By lionofludesch
24th Nov 2021 14:54

GHarr497688 wrote:

The client understands their own business more than you. You are not required to be judge and jury and you are not required to be a Tax Inspector or similar. As such I don't believe your work requires you to advise clients on if a claim should or should not be paid back unless something very obvious comes to light like a business claiming when they have ceased to trade prior to the Coronavirus pandemic. I am worried that you think you have such power.

Actually, whilst it might be legally OK to ask "what's it got to do with me?", I agree with Really and Drags.

I would want to give my clients, if I had any, enough information to keep them out of trouble. Reviewing claims made would be a part of that. Claims 1 and 2 were fairly straightforward but I doubt if the rest were fully understood by many claimants.

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Replying to lionofludesch:
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By jonharris999
24th Nov 2021 16:23

I am a +1 about Really and Drags, although has Drags agreed to being called Drags?

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By ireallyshouldknowthisbut
24th Nov 2021 13:42

This is quite useful

https://www.accountingweb.co.uk/tax/personal-tax/ready-for-a-seiss-chall...

I have found these a real pain to do. The first 2 grants are fairly easy, but the 3rd and 4th can be highly subjective given the basis is "what they expected" not "what they did last year". Virtually none of my clients really understand the rules around this and I am not convinced I do really either.

I assume HMRC will just mechanistically "nudge" (ie sending snotty letters or just bang in a fine) to those claiming 3rd and 4th when their results for 20/21 are not much impacted when comparing with the past, but we just don't know yet.

I disagree very strongly with the suggestion it is not our role to guide clients in this matter. Indeed I would go as far to say I would consider myself negligent if I did not consider the matter with my clients and try and explain it to them. Its part of the tax return, so its part of my role along with student loans, child benefit and all the rest of it.

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Replying to ireallyshouldknowthisbut:
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By Tax Dragon
24th Nov 2021 14:17

One of the best comments I have seen in this forum on this difficult subject. Thank you.

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By Paul Crowley
24th Nov 2021 15:10

Almost impossible to police this
Reason is that we are looking with hindsight
1 and 2 Anyone can claim, adversely affected was pretty much it
3 The test is at the time of the test. Expected position, no rule says pay it back if things worked out better than client at the time expected to happen.
I am still sat on one that claimed 3 that I have yet to decide on, not helped by the fact that HMRC appear to be waiting out and making no challenges until it is too late to be on time with payment
There is no help anywhere to guide the thought process on whether that client's expectation was unreasonable.

This is a tax on being reasonable or having a conscience.
As such is it a logical tax?

Followed to its logical conclusion, the return showing the claim as in error is clearly late as the overclaim should have been repaid months earlier

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Replying to Paul Crowley:
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By Tax Dragon
24th Nov 2021 15:31

Understand that in HMRC's mind, you are already policing such matters as whether this or that cost was incurred wholly and exclusively for the purposes of the business (a question which the courts have told us requires knowing, not only what was in the conscious mind of the client, but their subconscious motives too!) At least this time all the tests are (AFAIK) conscious ones - so you can ask the client about them. As stepurhan hints, if you suspect the client's reply is a lie, you have a bigger problem than what you put on the tax return.

Incidentally, as I have said before, I don't understand the "we should have been involved at the time" argument. Of course we couldn't make claims (and be thankful for that, else you'd be facing multiple court cases now) - but we could advise about them. We weren't "cut out of the process", other than by clients not asking.

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Replying to Tax Dragon:
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By Paul Crowley
24th Nov 2021 15:42

HMRC does not have either a mind or a conscience
Intension of parliament is single direction
If taxpayer gets swept in as collateral damage then HMRC accept all freebies

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Replying to Paul Crowley:
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By Tax Dragon
24th Nov 2021 16:25

My bad - ignore the handful of words before the first comma.

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Stepurhan
By stepurhan
24th Nov 2021 15:17

I think that we should not be expected to police this, with HMRC having chosen to cut us out of the process. If we had been involved at the start, we could have asked the client the difficult questions before any claim.

However, that is not to say that we should not alert clients when we think there is a potential issue. If a business has profits the same as previous years, ask clients why they thought they were affected. If a client stopped getting income because of lockdowns, and did not appear to restart, ask why they thought the business would continue when claiming.

As long as they give halfway decent answers to those questions, I have no problem submitting returns treating the grants as non-repayable. We've alerted clients to potential HMRC avenues of attack (thus providing guidance) but, as with the original claim, it is up to them whether they are happy to face HMRC on that basis or opt to repay.

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By jonharris999
24th Nov 2021 16:21

For 3 and 4, what does she say when you ask why she reasonably believed that the crisis was reducing her turnover from what it would have been if there hadn't been one?

This forum has been full of accountants worried that their clients might not have credible answers to that question, but I'm not sure that we've uncovered even a single example which, on inspection, was not credible.

Round 5 was a bit more mathematical in some respects so should be easier to come to a conclusion on.

I fear we may be over-egging the pudding in many cases. Couple of simple questions, mostly simple answers; the evidence of this forum is that cases that do not fall into that category are rare or even non-existent.

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Replying to jonharris999:
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By Tax Dragon
24th Nov 2021 16:37

Well, a lot of accountants (in here anyway) seem to be saying they won't ask the question. So the cases in here probably don't reflect the full spectrum of answers/situations. I'm a little out of the loop atm but I am aware we have clients who (rightly) claimed, others who (rightly) didn't [because their business blossomed in lockdown in a way it wouldn't have otherwise] and others in a similar situation to the latter who did and who have repaid or will repay. I can't believe we are alone. In fact, I know we're not, because other Awebbers have reported similarly.

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Replying to Tax Dragon:
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By jonharris999
24th Nov 2021 17:48

I don't want to open an old can of worms here - no I really don't - but I don't really grasp why your third category there (claimed, but then business blossomed and are now repaying) exist, certainly not in any significant number. We have precisely 0 of these and I'll eat my hat if any come forward in the time remaining.

If their claim was based on legitimate belief when it was made then it does not have to be repaid. If it was not based on legitimate belief when it was made, then fair enough, but it seems extraordinary that you or any of our jolly nice regular contributors would have (m)any of these types.

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Replying to jonharris999:
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By Tax Dragon
24th Nov 2021 19:07

I think we know (or legitimately believe) from the previous discussions that we basically agree about much of this, but focus our concerns on different groups. I worry about the "not my problem guv" brigade. I've called it unprofessional before; ireally goes further above (and I don't disagree). You worry about taxpayers repaying when they don't need to. Either off their own bat or under the misguidance of their accountant.

Both concerns are valid, imho. And not mutually exclusive. (Pretty sure we've said and agreed that before too.)

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Replying to Tax Dragon:
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By jonharris999
24th Nov 2021 19:38

Yes, I certainly agree that "not my problem guv" really doesn't hold water.

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Replying to Tax Dragon:
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By gillybean04
25th Nov 2021 12:20

Agree with both your sentiments and those expressed by ireally.

I'd advise anyone of the opinion that they "were excluded from SEISS, so don't need to check it's right for the return" to check the code of ethics/conduct of their professional body and also the standards set by HMRC. I'd also check what the potential consequences are for any breach of those ethics/standards, and try to imagine how those potential consequences might impact on them personally, or on their clients.

Just to be crystal, I'm not saying what will happen. Just that they may wish to consider the possible consequences, before they commit to their position.

It's a disservice to clients (and to yourself as a professional) to allow personal grievances against processes to lower the quality of service and care you afford clients. You owe clients a duty of care. That doesn't change just because you've took the hump over something hmrc/treasury/hmg did.

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Replying to gillybean04:
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By Tax Dragon
25th Nov 2021 15:13

Very well said.

If I might just add… IMHO taking the hump, as you put it, is just so so soooo stupid anyway. Do these folk take the hump that a bank won't let them take out a mortgage on a client's behalf? Are they upset that it's not them completing their clients' applications for child benefit? Or obtaining (non-pandemic-related) grants? What about signing their clients' SPAs? Taking out leases? Etc.

FFS, we can't 'even' sign accounts or tax returns on clients' behalf. Nor should we be able to.

You're an accountant, not an attorney. Get a grip.

(Sorry... that was way more direct [ranty?] than I intended. Valid, though, right? And go me :~P)

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Replying to gillybean04:
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By Leywood
26th Nov 2021 07:10

Very well said.

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Replying to Tax Dragon:
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By Paul Crowley
25th Nov 2021 15:32

Yet to come across anyone who has repaid
One reason might be that there is no such obligation if the claim was an honest claim

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Replying to Paul Crowley:
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By Tax Dragon
25th Nov 2021 15:36

Whatevs.

Got it off my chest now. Feel better.

AWeb therapy.

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Replying to Paul Crowley:
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By Wanderer
26th Nov 2021 08:50

Paul Crowley wrote:

Yet to come across anyone who has repaid

We have.
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Replying to Wanderer:
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By jonharris999
26th Nov 2021 08:55

Are you able to describe the circumstances?

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Replying to jonharris999:
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By Ruth Pringle
25th Nov 2021 16:21

To be honest, Jon, I haven't asked her yet. I want to be completely clear in my head exactly what I'm asking before I broach the question. That's why I would really like to see the screens she went through when applying so that I'm asking the same questions and reading the same HMRC spiel.

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Replying to Ruth Pringle:
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By justsotax
25th Nov 2021 17:05

I can't say I disagree with the sentiment put forward by TD et al, we have a duty of care. But there is a line, its just where you choose to draw it.

The trouble is that we are not depending on some clear cut rules, which maybe supported by case law, we are simply left to decide whether the client was truthful in saying they were adversely affected (opinion over fact?).

So what happens if we had been given the job.....I am not convinced it would have been that different....we would ask the client were they adversely affected....? The only real difference is that we would have caveated the hell out of the claim.....but i am not sure that is providing a duty of care to the client....more just covering ourselves.....

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Replying to Ruth Pringle:
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By Tax Dragon
25th Nov 2021 23:01

Ruth Pringle wrote:

To be honest, Jon, I haven't asked her yet. I want to be completely clear in my head exactly what I'm asking before I broach the question. That's why I would really like to see the screens she went through when applying so that I'm asking the same questions and reading the same HMRC spiel.

I don't actually see the point of seeing the screens and reading the spiel, to be honest. It might even put you in danger of falling into the trap that Jon has written about so eloquently previously. Did you see this thread, for example? https://www.accountingweb.co.uk/any-answers/anyone-else-concerned-about-...

If a client believed the business was being affected as described, and if that belief was reasonable, then the claim is not invalidated by that reasonable belief subsequently proving to be erroneous.

Client should have contemporaneous evidence that you can look at (and HMRC can ask for - this could be the basis of your discussion) from when they made the claim that demonstrates the reasonableness of their belief.

For more, see Hugo's comment in that other thread - he really did say it better than me.

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Replying to Tax Dragon:
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By Tax Dragon
26th Nov 2021 02:16

Additional: FWIW, the only point (in relation to reasonable belief) that I have identified where I don't agree with Jon (as I understand him) is that he seems to think it is one test. Accordingly, claims were either correct (client believed what they said) or fraudulent (client didn't believe but claimed anyway); never (or virtually never) incorrect. But of course it's actually two tests, else there was no point including the word 'reasonable' in the rulebook.

As I say above I think it's evidence of that reasonableness that clients should be able to provide. Not of the belief itself. (As I've said before, if you think a client is lying about that, you have a bigger problem than what you put on their tax return.)

Clients can't actually tell you their belief was reasonable... ultimately that's for a tribunal to decide. But they ought to be able to tell you (with contemporaneous evidence) the basis on which they claimed. And, whilst the existence of belief is not disproved when the belief proves false, you do have to question the reasonableness of the belief when that happens.

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Replying to Tax Dragon:
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By Leywood
26th Nov 2021 07:14

[quote=Tax Dragon]

Ruth Pringle wrote:

I don't actually see the point of seeing the screens and reading the spiel, to be honest. It might even put you in danger of falling into the trap that Jon has written about so eloquently previously. Did you see this thread, for example? https://www.accountingweb.co.uk/any-answers/anyone-else-concerned-about-...

Client should have contemporaneous evidence that you can look at (and HMRC can ask for - this could be the basis of your discussion) from when they made the claim that demonstrates the reasonableness of their belief.

^^^^this, I suspect is where a lot of clients, or more likely the DIY class, will fall down. I encouraged all mine to keep notes, as memories fail.

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Replying to Leywood:
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By jonharris999
26th Nov 2021 08:30

Yes. Much as I dread them, we've got to get into some real challenges now if we are going to get any further with these questions.

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