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SEISS Review received

and I dont think I agree with the decision

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A client of mine when he checked his eligilibility was advised online that he wasnt eligible.  I believed he was as his earnings in 2018/19 were below £50,000 and his self employed earnings were over 50% of his total income.  I went through the appeal procedure online and had a call from the Revenue today advising he wasn't eligible because his average three years profits were over £50,000.

However, his taxable earnings for 2018/19 were under and the guidance says they look at this year first and I believed they only looked at the other years if he wasn't eligible in 2018/19.  Have I misunderstood this?

Before I give the client the bad news, are HMRC right or should I appeal again?

FYI his figures are approximately 2018/19 - total income £42k (s/e is £26k), 2017/18 total income £100k (s/e 36k), 2016/17 total income £45k (s/e £33k).

Average total income works out at £62k so I can see why he wouldn't be eligible on this basis, but on 2018/19 he definitely is.

Replies (10)

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Should Be Working ... not playing with the car
By should_be_working
12th May 2020 11:41

Can't help with a solution yet, but I've had something similar, though with a client whose total income is below £50k.
18/19 £19,890 (s/e 12,242)
17/18 £21,508 (s/e 16,859) (but capital gain of £76,349)
16/17 £nil (s/e loss)

Thanks (1)
Replying to should_be_working:
Kitten
By Hazel Accounts
12th May 2020 12:54

See guidance (link on my other reply) - they should look at 18/19 alone first and only if that's ineligible move on. Also the capital gain should be irrelevant as it says INCOME:

"HMRC will work out your non-trading income by adding together all your:

income from earnings
property income
dividends
savings income
pension income
overseas income
miscellaneous income (including taxable social security income)"

Thanks (0)
By ireallyshouldknowthisbut
12th May 2020 11:44

I have one who is over on the average, but under on 18/19 and it came up as eligible, which it should be based on the legislation.

Just rechecked it, and it still says its OK.

Thanks (1)
Replying to ireallyshouldknowthisbut:
avatar
By SJRUK
12th May 2020 12:23

I think I might see if I can re-appeal then.
His wife in is the exact same position (its because they cashed in a pension in 2017/18) so I'll see what the HMRC says when they ring about her. I won't be on the hop then, as I wasn't ready when they called this morning !!

Thanks (0)
Kitten
By Hazel Accounts
12th May 2020 12:52

according to the guidance your client would appear to be eligible - it does say look at 18/19 alone first - see here and quote below:

https://www.gov.uk/guidance/how-hmrc-works-out-total-income-and-trading-...

Eligibility

If you have traded for all 3 years we will first look at your 2018 to 2019 Self Assessment tax return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income.

If you’re not eligible based on the 2018 to 2019 Self Assessment tax return, we will then look at the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019.

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Replying to Hazel Accounts:
By ireallyshouldknowthisbut
12th May 2020 13:04
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Replying to ireallyshouldknowthisbut:
Kitten
By Hazel Accounts
13th May 2020 16:17

I've read that and essentially it says the same thing.
Condition to be met is trading income is between £1 and £50,000 AND that it is greater than other income in either
(A) 2018/19 or
(B) the average of 3 years (2016/17, 17/18 & 18/19) or
(C) the average of 2 years 17/18 & 18/19 if no trade in 16/17.

Only one of the above has to be met so if ok in 18/19 then don't need to worry about average of last 2/3 years

Thanks (0)
RLI
By lionofludesch
12th May 2020 11:57

As I read the ever-changing regulations, the taxpayer only has to trade into 2020/21.

He doesn't have to complete the year.

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avatar
By pauld
12th May 2020 15:36

5.1 of the legislation states that you have to meet conditions A , B or C.

Does that mean A AND B or C or does it mean A OR B or C?

If the latter then your client qualifies.

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Replying to pauld:
avatar
By SJRUK
12th May 2020 15:57

Surely it’s A or B or C
Especially in conjunction with the HMRC guidance in the link above.

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