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Self Employed Income Support Scheme help

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Hi,

 

I am asking to see if you have had any other cases like my case below, and if there is a solution? I have researched the legislation a bit.

 

Self Employed Income Support Scheme:

 

There is an issue on the above as compliant taxpayers, (those who complied with the tax return filing date of 31 January 2020) are being disadvantaged over those who were not compliant with the 31 January date. see scenarios below.

 

this is the guidance published on 26 March

 

https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-...

 

The normal filing date for tax returns is 31 January 2020, (with a further 12 months to file an amendment, there is a box on the tax return where the taxpayer can tick to state that the figures are provisional))

 

With the SEISS scheme I have been on to HMRC webchat because I have been told that my claim has been rejected:

 

scenario 1:

 

I have filed 2019 tax return by 31 January 2020 and then filed an amendment by 23 April 2020, which was rejected because the amendment was not filed by 26 March (the date the guidance was published).

 

scenario 2 :

 

I know of other taxpayers who did not file tax return by 31 January 2020 and filed the tax return by 23 April 2020 and are being accepted.

 

This gives the impression that clients who complied with the 31 January 2020 deadline are being disadvantaged

 

HMRC webchat not really helpful, and just refer to the guidance.

 

also see relevant legislation below...... now, page 5 point 10.

 

https://assets.publishing.service.gov.uk/government/uploads/system/uploa...

 

It still means that those who filed tax returns on 31 January and amended between 26 March and 23 April will be dis advantaged viz a viz those who did not file on 31 January and filed by 23 April

 

HMRC might put forward the argument that those who were compliant and filed tax return in January, could have amended so as to take greater benefit from the SEISS scheme, but the counter argument could also be made that those who were not compliant in January could also have done this, and they had up to 23 April to file their return.

 

I trust that this makes sense, and that you can help.

 

Thanks

 

 

Replies (59)

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By Crouchy
03rd Jul 2020 16:30

why was the return amended?

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Replying to Crouchy:
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By frankie3
03rd Jul 2020 16:39

all of the relevant information was not available at 31 January

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RLI
By lionofludesch
03rd Jul 2020 16:33

Why was your claim rejected ?

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Replying to lionofludesch:
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By frankie3
03rd Jul 2020 16:38

return sent in at 31 January was a provisional one and was amended before 23 April but after 26 march

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By frankie3
03rd Jul 2020 16:34

all of the relevant information was not available at 31 January

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Replying to frankie3:
RLI
By lionofludesch
03rd Jul 2020 17:56

frankie3 wrote:

all of the relevant information was not available at 31 January

I'm guessing that your accounts weren't done ten months after the year end and you decided to file a return with no self employment income to save yourself a £100 penalty.

Consequently, your income wasn't high enough.

Let us know if that's incorrect.

Where I do agree with you is in allowing folk a month to get up to date. I would've said, "Not declared your return in on time ? We'll count it as nil then".

You can appeal but I suspect you'll be wasting your time.

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Replying to lionofludesch:
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By frankie3
03rd Jul 2020 17:27

Accounts done and filed by 31 January but had to be amended for capital gains info on which i was waiting from solicitor

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Replying to frankie3:
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By SXGuy
04th Jul 2020 07:15

Capital gains wouldn't be calculated as part of your income for SEISS. So Where's the disadvantage or loss? Still unclear

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By Tim Vane
03rd Jul 2020 16:41

I am not sure what help you are asking for, but if you are asking us to change the law, you've come to the wrong place. The place to start is your MP. Or, in reality, the place to start is nowhere; there are winners and losers with SEISS. You are one of the less fortunate. Sorry about that. Move on.

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Replying to Tim Vane:
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By frankie3
03rd Jul 2020 17:06

Thanks for your reply, I have already been on to my MP who did not understand that non compliant taxpayers had an advantage over non compliant ones! I was just asking if any one had any instance like this and that I was not mis undersdtanding the legislation.

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Replying to frankie3:
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By Southwestbeancounter
03rd Jul 2020 17:55

I don't doubt your MP didn't understand - I was miffed when Adam Fleming and Laura Kuenssberg got it completely wrong on Coronavirus Newscast or whatever it's called and said that the 23rd April deadline was so that the newly self-employed didn't get left out (as the 31 January deadline was too early for them to have submitted their 2019 tax returns)!

We had a couple of cases like this - some worked slightly in the client's favour some did not but as the cut off dates were different and we, like you, had a couple of clients who we couldn't finalise fully by the end of January it didn't bother us as we did everything by the rules - it was HMRC who were out of line by not aligning the cut off dates and as you say the non-compliant were definitely given an advantage.

I can understand this can be quite an issue if this impacts your client negatively to a large sum but none of us could have seen by 31st January quite how this year was going to pan out. Not sure who you appeal to as the rules are out of sync to be honest which is what has caused this issue in the first place.

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Replying to Southwestbeancounter:
RLI
By lionofludesch
03rd Jul 2020 18:05

Southwestbeancounter wrote:

We had a couple of cases like this .......

Was your case the same ?

The OP implies that his profits were unchanged between his original return and his amendment, yet his entire claim was rejected.

I've asked him more than once and he still says the amendment only related to CGT.

Thanks (3)
Replying to lionofludesch:
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By frankie3
03rd Jul 2020 18:22

southwestbeancounter seems to understand it, Yes I know, CGT should not affect SEISS claim, but HMRC in their wisdom rejected the claim. In hindsight, would have been better to hold off amending for CGT till SEISS all over, but would have meant then that correct tax figure wouldnt be paid on time and interest etc..... you know the story, at the heel of the hunt, for SEISS I lose out ...

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Replying to lionofludesch:
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By Southwestbeancounter
03rd Jul 2020 18:40

Hi Lion

Not not with CGT but simply with amended SA pages.

I'm not sure why the CGT would cause this issue to be honest as surely they don't take that into account with the 50% rule or something daft do they?

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Replying to Southwestbeancounter:
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By frankie3
03rd Jul 2020 19:09

see attached being extract from link in my original post
10. For the purposes of SEISS, amounts of trading profits and relevant income are determined
by reference to a person’s tax returns as at 23 April 2020 but no account will be taken of any
amendment made to a tax return on or after 6pm on 26 March 2020 or any contract settlement.

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Replying to frankie3:
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By Paul Crowley
03rd Jul 2020 18:31

See below
the big one

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By Paul Crowley
03rd Jul 2020 16:51

Discussed before.
Sounds like
Estimate of income low to avoid paying tax
Ammend to very high with no capital allowances because there is free money
How come records to ye 5 april 2019 STILL not available by Jan 2020. And Feb2020 And most of March 2020

Rejected because self employed income less than other income
End of story
Rules is rules

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Replying to Paul Crowley:
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By frankie3
03rd Jul 2020 17:12

No original not low, was waiting on info form solicitor for capital gains tax, and had to amend when received, so HMRC then treated return as amended after SEISS deadline, you are very cynical Paul lol !

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Replying to frankie3:
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By Paul Crowley
03rd Jul 2020 17:17

What were the original figures and the ammended figures for self-employment and other income for ye 2019?
First year of trading?

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Replying to Paul Crowley:
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By frankie3
03rd Jul 2020 17:32

not sure why first year of trading relevant, it seems that if one had to amend in good faith after 26 march they are not eligible, whereas those who had not filed at all at 31 January and had not filed by 26 march, they are were given up to 23 april to file and so qualify

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Replying to frankie3:
RLI
By lionofludesch
03rd Jul 2020 17:22

frankie3 wrote:

No original not low, was waiting on info form solicitor for capital gains tax, and had to amend when received, so HMRC then treated return as amended after SEISS deadline, you are very cynical Paul lol !

How does the CGT bit of your form affect your self employment figures ? I can't see why the lack of CGT information prevents you submitting correct income from self employment profits on your return.

Why did you wait so long to ask the solicitor for the information you needed ?

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Replying to lionofludesch:
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By frankie3
03rd Jul 2020 17:34

no it does not affect it, hmrc treat it as a an amended return, slow solicitor reason for lateness of amendment

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Replying to frankie3:
RLI
By lionofludesch
03rd Jul 2020 17:47

frankie3 wrote:

no it does not affect it, hmrc treat it as a an amended return, slow solicitor reason for lateness of amendment

Ten months* ? Might be worth suing the solicitor.

Well, my understanding was that the originally submitted return would stand but I admit that I didn't pay much attention as all my clients - bar one, who'd ceased trading anyway -submitted on time.

*At least.

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Replying to lionofludesch:
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By Mr_awol
03rd Jul 2020 21:24

Probably not worth suing the solicitor who probably gave the client the info at the time of transaction 10-22 months previously and only got asked for a copy at Christmas time

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Replying to Mr_awol:
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By lionofludesch
03rd Jul 2020 21:46

Mr_awol wrote:

Probably not worth suing the solicitor who probably gave the client the info at the time of transaction 10-22 months previously and only got asked for a copy at Christmas time

An outrageous implication!!

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By Tim Vane
03rd Jul 2020 17:49

CGT is not relevant to SEISS, so this entire thread was a waste of everybody's time.

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Replying to Tim Vane:
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By frankie3
03rd Jul 2020 18:00

Tim, I know its not relevant to SEISS, but HMRC using it as excuse to refuse SEISS !

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By Matrix
03rd Jul 2020 18:14

Sorry I don’t understand.

Are HMRC saying that the estimated return does not meet the criteria for a tax return filed for 2018-19 under SEISS?

or

Were the self employed profits excluded from this return and only included for the first time on the amended return?

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Replying to Matrix:
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By frankie3
03rd Jul 2020 18:26

original return filed by 31 January 2020 and then amended after 26 March and before 23 April, so I was compliant in that I filed original return by 31 January, but HMRC rejecting claim whereas ....

someone who did not file any return by 31 January, had up to 23 April to file 2018 19 return and were able to qualify

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Replying to frankie3:
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By Matrix
03rd Jul 2020 18:31

I can only help you if you answer my question please.

HMRC surely have to accept one or other of the returns or are they accepting neither? If you look at the SEISS legislation a tax return is defined as filed under s8 TMA.

You need to answer the pertinent question - was the self employed income included in the return filed by 31 January 2020 or not?

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Replying to Matrix:
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By frankie3
03rd Jul 2020 19:06

yes it was

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Replying to Matrix:
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By frankie3
03rd Jul 2020 19:06

yes it was

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Replying to Matrix:
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By frankie3
03rd Jul 2020 19:11

see extract below from the link in my original post

10. For the purposes of SEISS, amounts of trading profits and relevant income are determined
by reference to a person’s tax returns as at 23 April 2020 but no account will be taken of any
amendment made to a tax return on or after 6pm on 26 March 2020 or any contract settlement.

Thanks (0)
Replying to frankie3:
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By Southwestbeancounter
03rd Jul 2020 18:45

So, in short, were the only amendments (between 26 March and 23 April) to the CGT pages or were the SA pages amended as well?

I think that is the crux of the matter.....

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Replying to Southwestbeancounter:
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By frankie3
03rd Jul 2020 19:11

see extract below from the link in my original post

10. For the purposes of SEISS, amounts of trading profits and relevant income are determined
by reference to a person’s tax returns as at 23 April 2020 but no account will be taken of any
amendment made to a tax return on or after 6pm on 26 March 2020 or any contract settlement.

Thanks (0)
Replying to Southwestbeancounter:
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By frankie3
03rd Jul 2020 19:11

see extract below from the link in my original post

10. For the purposes of SEISS, amounts of trading profits and relevant income are determined
by reference to a person’s tax returns as at 23 April 2020 but no account will be taken of any
amendment made to a tax return on or after 6pm on 26 March 2020 or any contract settlement.

Thanks (0)
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By Paul Crowley
03rd Jul 2020 18:28

If your tax return is late, amended or under enquiry
If you did not submit your Self Assessment tax return for the tax year 2018 to 2019 on or before 23 April 2020 you will not be able to claim. Claims based on late returns submitted between 26 March 2020 and 23 April 2020 will be subject to additional anti-fraud checks by HMRC.

When working out your eligibility or amount of the grant HMRC will not take into account Self Assessment tax returns for the tax years 2016 to 2017 or 2017 to 2018 if they are submitted after 23 April 2020.

HMRC will use data on the tax returns already submitted to identify those eligible to claim.

When working out your eligibility or amount of the grant we will not take into account any changes made to submitted returns after 6pm on 26 March 2020.

We will also only use the information in your original return if your tax return:

is under enquiry
has been the subject of a contract settlement

Per HMRC

HMRC will use data on the tax returns already submitted to identify those eligible to claim.

ARE YOU SAYING HMRC ARE IGNORING THE ABOVE LINE?

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Replying to Paul Crowley:
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By frankie3
03rd Jul 2020 19:15

look at the 2 scenarios in original post, this is what has happened

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RLI
By lionofludesch
03rd Jul 2020 18:49

Jaysus, Frankie - just answer the question.

Were the self employed profits amended or not ?

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Replying to lionofludesch:
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By frankie3
03rd Jul 2020 19:13

No

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Replying to frankie3:
RLI
By lionofludesch
03rd Jul 2020 19:23

At last.

Then I think you have a good case and HMRC haven't applied the rules correctly.

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Replying to lionofludesch:
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By frankie3
03rd Jul 2020 19:34

HMRC are relying on this...." any amendment...."

see extract below from the link in my original post

10. For the purposes of SEISS, amounts of trading profits and relevant income are determined
by reference to a person’s tax returns as at 23 April 2020 but no account will be taken of any
amendment made to a tax return on or after 6pm on 26 March 2020 or any contract settlement.

Thanks (0)
Replying to frankie3:
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By Matrix
03rd Jul 2020 19:38

Why do you want them to take account of the amended return and not use the original return?

Or are they not using the original return either?

Sorry I still don’t understand.

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Replying to frankie3:
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By Paul Crowley
03rd Jul 2020 20:21

How do you know this?

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Replying to frankie3:
RLI
By lionofludesch
03rd Jul 2020 20:48

frankie3 wrote:

HMRC are relying on this...." any amendment...."

see extract below from the link in my original post

10. For the purposes of SEISS, amounts of trading profits and relevant income are determined
by reference to a person’s tax returns as at 23 April 2020 but no account will be taken of any
amendment made to a tax return on or after 6pm on 26 March 2020 or any contract settlement.

They should ignore the amendment but not the original return.

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JCACE
By jcace
03rd Jul 2020 19:42

Frankie, to the nearest thousand, how much self employment taxable profit did you report on the original return filed on time?
How much other income did you report at that time, and what sort of income?
Was 2018/19 your first year of self employment?
These are relevant questions that will help clarify whether you might be eligible.

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Replying to jcace:
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By frankie3
03rd Jul 2020 19:45

self employed was 100 % of income, profits were £ 40 k approx, has benn in business for years

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Replying to frankie3:
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By Southwestbeancounter
03rd Jul 2020 19:56

....and the amended return showed exactly the same SE figures?

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Replying to frankie3:
JCACE
By jcace
03rd Jul 2020 21:58

Bizarre. They should have relied on the amounts reported in the original return. "Any amendment" to those figures should be ignored.

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By jonharris999
03rd Jul 2020 23:29

I've been dealing with quite a few unique/idiosyncratic queries on SEISS, but haven't come across this one.

If I have followed the thread correctly, then Frankie is saying that the ineligibility is a consequence of the original return having been marked as including "provisional" figures, even though the amended return's figures were no different as regarded trading income and total income.

All the cases I have looked at have resulted in rejection of appeal where HMRC followed the rules, however unfair or arbitrary the rules seem, and I'm sorry to say Frankie I'm afraid this looks like one of those to me. If someone could be paid SEISS on the basis of amended provisional figures, then there would be little point in having the rule not to accept amendations. I accept that you had good intentions here but the lesson is not to tick the 'provisional' figures box. A return can always be amended, whether or not that box was ticked, because it is true that all kinds of circumstances arise where information is received late.

I know of a very small number of cases where SEISS ineligibilities have been successfully challenged (or where complaints are still open and in negotiation) but the premise of all of these is that HMRC have made some error in their treatment of that person's account previous to 31/1/20 which led to the ineligibility - in other words, you'd need to show that this is their fault in some way. And I don't see how you can - sorry.

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