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SEISS Grant 5 - turnover increased

"You may still qualify"?

Didn't find your answer?

HMRC's email advising "customers" about their eligibility for the fifth grant states :

"If your turnover increased, you may still qualify for the 30% grant. You’ll still need to reasonably believe that, due to reduced demand or inability to trade between 1 May and 30 ‌‌September ‌‌2021, you will suffer a significant reduction in trading profits."

I've searched and searched but can't find anything to back this up in the HMRC or professional bodies' guidance . Can anyone shed any light on this?  I had thought if turnover increased then no claim was possible. 

Replies (8)

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By AndyC555
03rd Aug 2021 11:19

A more salient question would be where in any of the guidance does it say that if your (look-back) turnover increases, you will NOT be eligible.

What it does say is that to qualify for the full grant, 'lookback' turnover needs to be down by 30%, otherwise you are limited to the smaller grant.

Remember that this grant is supposed to cover 'now', not compensate for 'then'.

What would make you ineligible for any grant is if there were no 'significant' reduction in turnover 'now' due to Covid restrictions.

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By fawltybasil2575
03rd Aug 2021 11:48

@ Cat's whiskers (OP).

As ever, it is the legislation which answers your question – see 5.2 of the Schedule to the Treasury Direction for SEISS 5, here:-

https://assets.publishing.service.gov.uk/government/uploads/system/uploa....

“In any other case” thus, by definition, includes cases where there has been an INCREASE in Turnover in 2020/21.

See Rebecca Cave’s article here:-

https://www.accountingweb.co.uk/tax/personal-tax/seiss-5-grant-applicati...

Unfortunately, and with respect to her, Rebecca’s statement, that Turnover increases in 2020/21 result in there being no claim being valid, is incorrect. One of the responses to Rebecca's article refers to SEISS 5 claims made, with Turnover increases, such claims being accepted.

Basil.

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Replying to fawltybasil2575:
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By Latinaid
03rd Aug 2021 14:08

fawltybasil2575 wrote:

Unfortunately, and with respect to her, Rebecca’s statement, that Turnover increases in 2020/21 result in there being no claim being valid, is incorrect. One of the responses to Rebecca's article refers to SEISS 5 claims made, with Turnover increases, such claims being accepted.

Basil.

Yes, that was me. I should say that it's anecdotal, in that I was told it on Twitter by someone I don't know. But it backs up what I was told by two HMRC agents when I looked into it.

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By Duggimon
03rd Aug 2021 14:33

The waters have been muddied by introducing a historic test to determine whether you're looking at 30% or 80%, but the ultimate test of eligibility is and always has been comparing the turnover you expect you will have in the period covered by the grant against the turnover you would expect to have if there wasn't a pandemic. If the first number is smaller than the other by an amount you deem significant then claim away.

It matters not one jot what you earned last year, or two years ago, or on the forty two Wednesdays preceding Christmas 1986, only what you expect to earn with and without the pandemic over the claim period.

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Replying to Duggimon:
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By Latinaid
03rd Aug 2021 15:13

Duggimon wrote:

... the ultimate test of eligibility is and always has been comparing the turnover you expect you will have in the period covered by the grant against the turnover you would expect to have if there wasn't a pandemic. .

Strictly, the comparison is of profit, rather than turnover - though in practice, since the claimant isn't allowed to take account of increased costs due to COVID, it's going to be turnover which is key. But all of this just goes to show how muddied those waters are. I'm getting around 4 or 5 queries a day on Twitter from people who don't know what 'turnover' means.

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Replying to Latinaid:
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By AndyC555
05th Aug 2021 10:18

'Turnover' is the thing you compare with tax paid in order to confuse the public (c) Tax 'Justice' Campaigners

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Replying to Duggimon:
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By Hut15
11th Aug 2021 09:34

That's an interesting point. I've had a client with modest growth compared with previous year (pre-pandemic). They have claimed SEISS on the grounds they expected more than modest growth. I have been trying to find a definitive answer on whether "significant reduction" and "adversely affected" means "compared with pre-pandemic figures" or "compared with your optimistic plans" and can't find it.

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Replying to Hut15:
By Duggimon
11th Aug 2021 10:15

As Basil already pointed out above, it's in the legislation, paragraph 4.3 https://assets.publishing.service.gov.uk/government/uploads/system/uploa...

Quote:

(a) the business of which has suffered reduced activity, capacity or demand in the qualifying period from that which could reasonably have been expected but for the adverse effect on the business of coronavirus or coronavirus disease, and

(b) which the claimant reasonably believes will suffer a significant reduction in trading profits for a relevant basis period from that which would otherwise have reasonably been expected as a result of that reduced activity, capacity or demand.

The assumption from many people seems to be that "reasonably have been expected" or "reasonably believes" means "compared with prior periods" but that's not what it says.

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