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Self Employed Income Support Grant Round 2

Self Employed Income Support Grant Round 2

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A 3-person painting and decorating partnerhip have claimed the 1st round of Self Employed Income Support. 

They did this in good faith at the time and consider that they were adversely affected due to client cancellation of jobs, re scheduling and one of their main client's closing sites. They can demonstrate days without any work that was previously booked in.

Since making the claim, they have experienced a mini boom in that they have been refurbishing closed pubs, clubs, offices and salons (probably funded by bounce back loans) so they expect to be actually up on profits for the year to date. They have put in the extra hours over a short period of time to 'make hay' whilst they do not know what the future holds. 

In my opinion this first claim is justifiable as I cannot see any reference to being able to demonstrate a lower turnover/profit for any particular reference period in HMRC examples of ‘adversely affected’ and they have had to ‘scale down due to lack of customers’ for certain periods at least initially.

Any opinions on this are welcome.

I have just sent out an email to clients to update them on the second round of this claim and this client has called in to say he will not be claiming as he is now earning more than ever.

I advised him that this second round will not be open for claims until August so he should wait and see how things pan out. Whilst he is currently doing very well, much of this is down to a very strong work ethic. His usual 10-15 mile radius client base has gone (lack of customers?) so he is driving to and from London and further afield (lives on the South Coast). His working day is at least a couple of hours longer and his travel costs have increased significantly. Local jobs booked in up to September have been cancelled. Work is now commercial rather than residential – can any of this be considered ‘adversely affected’ so that he can claim this second grant?

It’s refreshing to have a client doing well in the current times and to hear that he was not pushing this second claim. I pointed out to him that he may well have as much income if he did not chase this commercial work for a couple of weeks and instead make a claim and, quite rightly, he confirmed that he would rather work to earn his money……………..others, I’m sure would take a different option.

I pointed out that this is a final claim and that no further support is planned...........what happens if his work drys up towards the end of August..........he'd be kicking himself...........not a justification for a claim but i'm sure this is a consideration for many.

Would anyone see a justification for a second claim?

Replies (11)

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By lesley.barnes
03rd Jun 2020 15:01

Business might be booming but has he calculated profits - if he is travelling for miles and doing commercial rather than domestic are his rates as good and his expenses roughly the same? Is he making money now or is it just his perception? If he isn't suffering because of coronavirus I wouldn't be encouraging a second claim. The claim is for the period June, July and August - not for August onward. How would he show he has had losses in this quarter to justify a claim? If you encourage him to make a claim and HMRC check at a later date and find he wasn't eligible he could say that you advised him to make a fraudulant claim.

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Replying to lesley.barnes:
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By CWservices6064
03rd Jun 2020 15:27

Hi,

My opinion is that he is unlikely to qualify to make a second claim based on the information that he has shared but that he should hold off until August to see if things change and planned work is cancelled. Based on the guidance its seems that he would only need to loose one job or customer due to Coronavirus to qualify for the full grant.

I should have referred to work dropping off in August rather than September so i'll edit the post.

When you refer to demonstrating losses I assume that a days work cancelled due to Coronavirus and not replaced is sufficient even though he may have performed particularity well over the entire quarter compared with previous years due to working many more hours on the days he has work.

Luckily, client's are responsible for their own claims and I make it clear that this is the case and the making a fraudulent claim is never encouraged or advised!

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Replying to CWservices6064:
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By Southwestbeancounter
04th Jun 2020 13:56

I agree with Lesley and I think you have answered your own question to a certain extent.

I wouldn't encourage a client to claim a second time if they were considering not claiming, unless it was obvious they weren't reading the rules properly, and also they can't claim until the beginning of August in any event and two months is a very long time in the ever-changing COVID-19 times; Anything could happen in the interim.

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By SXGuy
03rd Jun 2020 15:31

Has the trade been affected by the corona Virus. Not will it be.

First claim stands. 2nd Claim doesn't if they continue to increase revenue over and above what they expected to.

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Replying to SXGuy:
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By CWservices6064
03rd Jun 2020 15:35

For arguments sake, if a planned 3 day job in August was cancelled by a customer due to Coronavirus and not replaced would the claim be justified?

Even if, over the quarter as a whole, he did particularity well turnover wise?

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Replying to CWservices6064:
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By lesley.barnes
03rd Jun 2020 16:44

I don't think the claim would be justified, I can't see how your client could claim that his business had been adversely affected by coronavirus. He could have a cancellation from a customer at anytime without coronavirus. If as you are saying overall his profits have increased in the quarter. You've said your client doesn't want to claim - I can't see what the problem is.

Thanks (2)
Replying to lesley.barnes:
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By CWservices6064
03rd Jun 2020 17:50

It's not a problem, just interested in others take on potential scenarios.

Having a customer cancellation for any other reason would specifically not result in qualifying for the grant where I think that loosing work because of Coronavirus would.

Your position seems to be a moral one rather than a technical one in terms of whether or not someone qualifies based on the guidance and I don't disagree.

Personally I don't think that anyone should be financially better off as a result of these claims but some are clearly going to gain, particularly the self-employed who have been allowed to both continue to work and make a claim for the entire period.

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Replying to lesley.barnes:
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By CWservices6064
03rd Jun 2020 17:50

It's not a problem, just interested in others take on potential scenarios.

Having a customer cancellation for any other reason would specifically not result in qualifying for the grant where I think that loosing work because of Coronavirus would.

Your position seems to be a moral one rather than a technical one in terms of whether or not someone qualifies based on the guidance and I don't disagree.

Personally I don't think that anyone should be financially better off as a result of these claims but some are clearly going to gain, particularly the self-employed who have been allowed to both continue to work and make a claim for the entire period.

Thanks (0)
Replying to CWservices6064:
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By lesley.barnes
03rd Jun 2020 23:35

I don't think my stance is a moral stance rather than technical. The guidance says that to be eligible your business has been adversely affected by corona virus. Your client believes he has benefited overall from corona virus. If he loses 3 days work because someone cancels he wouldn't be adversely affected overall. Yes the guidance is wide open to abuse and I don't see how HMRC will police it other than look at SA profits for 2020-21. That wouldn't be conclusive because someone could have a slump because of corona virus and correctly claim the grant followed by a boom in the second half of the year which would make up for earlier losses.

Thanks (2)
Tornado
By Tornado
04th Jun 2020 09:25

The Government have excluded Accountants from the claim process and specifically require claimants to make the claims themselves. We have no control over what those clients put into their claim application regardless of what we may have discussed with them, and I don't think it is our responsibility to take any liability for what they choose to put on their claim application as we are not making or verifying such claims.

The same goes for any loans or other grants that clients apply for that I am not professionally involved with.

I am being very clear on this in that I am happy to be responsible for advice or assistance that I give based on usual professional responsibilities, but I think there will be many circumstances where the client has verified circumstances to HMRC that are not true and that I would perhaps have advised against had I been involved.

To put it bluntly, the Government specifically excluded Agents from being involved in some claims, such as the Self Employed Income Support Scheme, making applicants entirely responsible for their own actions. Despite our natural desire to help our clients, the Government have actually done us a favour by taking responsibility away from us and we should just accept that protection as a gift.

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By Dp2020
04th Jun 2020 09:29

Example - client made 20k in 2017 2018,2019 self employed, then he took a job and only does a few hours self employed, showing £300 profit for 2020 and expecting similar for 2021. He lost a few of the hours he would have had due to virus and HMRC offered him the 80% of £5k average so he took it. Morally wrong, yet not in breach?

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