Hi, it's my first question here. Nice to e-meet you all.
A self-employed business that has been impacted by reduced activity, capacity or demand due to coronavirus (made a lot less profit due to covid restrictions), but disposed a business asset selling a part of the business (not stopping the whole trade and paying for it Capital Gains Tax/Business Asset Disposal Relief), still qualifies for SEISS grants? Does this disposal of business asset qualify for SEISS as "Trading profits", "non-trading income" or none of the two?
I've not been able to get an answer on this, hope to have better luck here. Thanks for your help!
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I've not been able to get an answer on this, hope to have better luck here. Thanks for your help!
Where have you been looking?
https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-...
The word “income” in tax terms is usually distinguished from gains and so that would be my guess.
Your best bet for a definitive answer would be to speak to the accountant who prepares your tax returns as most practising accountants are well versed in all Covid related financial matters.
I'm not sure you are asking the relevant question. You may well be in unchartered waters for most accountants and their knowledge of the law. You've certainly gone beyond my knowledge. Logic though says that no grant should be available in relation to the part of the business that has been sold.
There is a clear guidance page here on what HMRC count as trading profits for the purposes of calculating the grant https://www.gov.uk/guidance/how-hmrc-works-out-total-income-and-trading-... so thats a good place to start.
What type of business asset was sold, how has that led to reduced income, and what were the reasons for the sale?
For example is the client a courier with a motorbike for documents and a van for larger items, and they cant afford the van HP so had to get shot of it? Why couldn't they afford it? Is it because everyone was working from home e-signing stuff rather than using motorbike couriers?
Not that i can be sure the answer will enable us to make a decision - but it might at least rule it out, i guess.
You're not going to get a definitive answer to your core question on this site - partly because I doubt anyone has encountered your exact situation (but mostly we don't know sufficient details of your case - and you probably don't want to try setting it all out here when you could get a meeting with your accountant to sort it out).
FWIW it's unlikely that any transaction you describe as "disposed a business asset" will count as "Trading profits" unless your trade is the buying/selling of such assets ... but it's not that black-and-white.
I suspect the bigger issue may be when you say the disposal was "selling a part of the business" which, as Tax Dragon has flagged, raises the issue of whether you can claim against the ongoing operation of a 'business' that is (partly) not in existence.
<FWIW it's unlikely that any transaction you describe as "disposed a business asset" will count as "Trading profits" unless your trade is the buying/selling of such assets ... but it's not that black-and-white.
depends on what you mean by an asset, in this context trading profits mean net of capital allowances etc
but I agree I very much doubt we can answer the question without more information