SEISS - Too Much Other Income - What A Pain

Client Losing Out on SEISS by a Hairbreadth

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Self employed client started self-employment early 2018/19.

His 2018/19 total income from all sources was £32,050. Self employed profit was £14,950, which is 46.65% of total income.

If I had not claimed the £1,000 trading income allowance the profit would have risen to £15,950 (and total income risen to £33,050) which is 48.26% of total income.

Whichever way, client has lost out on the SEISS by a hairbreadth because his trading profit was not more than half of his total income.

 

 

Replies (14)

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By ireallyshouldknowthisbut
13th May 2020 15:02

Got a couple like that. its very knife edge

Like my director annual PAYE filed w/c 23rd March which had been prepared and authorised upto 11 months earlier which we always batch file last week in March*. Thats cost clients £2,500 a pop if out of work April through to July.

*On or before. I know I know, but HMRC seems to give zero stuffs about that unless you go tell 'em about it and we went for easy admin.

Thanks (1)
RLI
By lionofludesch
13th May 2020 15:12

Me too. I have three cases, two of which are 49+% self employment.

Sadly, it's the two close ones who would've really appreciated the money as they're far from being high earners.

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By John Stone
13th May 2020 15:14

£50001 but now zero income. Grant - nil.
£49999 and still trading. Grant £7500.
Can't be right.

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Replying to John Stone:
By penelope pitstop
13th May 2020 15:37

What's the logic of the £50,000 limit?

Can understand the logic of the 50% rule - the SEISS is for where the self-employment is the MAINSTAY of their income.

But if someone is disclosing profits of more than £50,000, good on them. Nice tax take for HMRC. Do not know why they should be punished.

But if someone is disclosing profits of around the PA limit, ("Ya just give the taxman enough to keep 'im happy mate" mentality), there most be more than a handful not declaring everything/claiming too many expenses.

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By SXGuy
13th May 2020 15:55

There has to be a cut off point somewhere though. Whether it's £1 or higher.

Client of mine went over the 50k average profit by £23 quid.

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Replying to SXGuy:
RLI
By lionofludesch
13th May 2020 16:03

SXGuy wrote:

There has to be a cut off point somewhere though. Whether it's £1 or higher.

Cut-off, yes. Cliff edge, no.

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the sea otter
By memyself-eye
13th May 2020 16:18

This is government - there is always a cliff edge - VAT, Stamp Duty, Beachy Head....

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Routemaster image
By tom123
13th May 2020 16:23

Bit like the child benefit charge!

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Replying to tom123:
RLI
By lionofludesch
13th May 2020 16:37

Or not - it's spread into manageable 1% steps over £10,000 of income.

You can tell you're not in practice, Tom !!

;-)

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By Duggimon
13th May 2020 16:40

Wherever you draw the line someone's got to be just on the other side of it. However, there's no particular reason they couldn't modify the grant amount by the percentage earned through self employment rather than chucking everyone just over the threshold in the bin.

Any potential solution to the sheer drop past £50K / 50% introduces more complexity though and I suppose that's why they've not introduced a sliding scale.

I can't help but think they could have done something more fair with just the information they have already though.

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By coolmanwithbeard
13th May 2020 16:56

I have a client who started being SE in 18/19. Her SE income is less than 50% but the other income was her job before she started. She has closed and now has no income seem wrong to me. Where you start SE during the year it should be 50% from that point. But then that's the problem with rushed legislation.

I have asked for a review as clearly the policy aim is not met.

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By petersaxton
15th May 2020 13:04

Client could still be eligible if you calculate income for the three years.

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Replying to petersaxton:
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By Wanderer
15th May 2020 13:52

petersaxton wrote:

Client could still be eligible if you calculate income for the three years.

How's that then?
penelope pitstop wrote:

Self employed client started self-employment early 2018/19.

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By Tax Dragon
15th May 2020 17:32

Some sort of means-testing makes sense, and they had to include something, but the £50,000 isn't testing means and is manifestly inequitable. We all know it.

And it's not just that there's a cliff edge. It's that the measure is profit, which [silly example alert] could be the same for a £1m t/o business with high costs as it is for a £40k t/o work-from-home business with next to no costs. How does testing profit judge needs or means?

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