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SEISS Planning for 6th Grant-20/21 Profit Share?

Any Danger of Allocating Low Profit Share 2020/21 to Partner with Pension Income.

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Am I worrying unnecessarily here. Husband and wife professional partnership has suffered badly with Covid due to the essential personal contact required. Profits have historically been around £21,000 each year. Husband has a private annual pension of around £5,000, wife has no other income. They are below state retirement age.

Profits are split each year to take advantage of the spare personal tax allowances and Class 4 bands. However, for 2020/21 the position is approximately as follows:

Husband's private pension £5,000

Husband's SEISS I,II and III £6,000

Wife's SEISS I,II and III £6,500

Partnership Profit £7,000

I can divide the profit of £7,000 in a way that saves the most tax and NIC by skewing the profit towards the wife, but by doing so the husband's private income would then represent more than 50% of his total income.

Clients will pat me on the back for reducing 2020/21 tax and NIC to the lowest possible figure. But will they pat me on the back if HMRC were to apply the 50% test on 2020/21 income for the 6th or later SEISS grants. Is there any likelihood of this happening.

Seems like HMRC will be able to dream up any rules for qualifying for future grants.

 

Replies (6)

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By SXGuy
15th Sep 2021 06:41

Have you heard something I haven't? Don't think there s going to be anymore seiss payments.

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By penelope pitstop
15th Sep 2021 14:40

More to the point, have you heard there's going to be no more Covid?

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Replying to penelope pitstop:
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By AdamMurphy
15th Sep 2021 15:21

We’ll be living with it, even magic money trees only have so much fruit

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By Winnie Wiggleroom
15th Sep 2021 07:04

of course you wouldn't dream of altering the profit split retrospectively would you now?

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By Hugo Fair
15th Sep 2021 11:23

For some reason, the words 'your cake', 'have' and 'eat it' keep popping into my mind.

Sometimes in life (usually in fact) a person has to make a decision and then live with the consequences - even if these were uncertain or unknown at the time.

This is all directed at the client not OP, as they are the ones who must make the decision and cannot blame OP later if they're unhappy with the result of what is a gamble.

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By possep
15th Sep 2021 14:05

As SEISS 1-4 were based on returns up to 2019/20 I don't see a problem for those grants as presumably profit share was more than his pension. As the criteria for SEISS 5 was to compare the turnover in 2019/20 with the year ended 5 April 2021 are you looking for a problem that doesn't exist. It could just be the SEISS 5 claim that is the tricky one. I can't see that the 50% earnings rule applied for that claim but happy to be enlightened.

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