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Whether the trade has been adversely affected ?

How can I assess the above ?

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Whether the trade has been adversely affected by the coronavirus pandemic ?

Does anyone have any guidance on how I can assess the above? There are several pointers I have thought of, but any further guidance much appreciated

1. Clients no longer in business , or paying less due to the pandemic

2. Clients likely to cease business within the foreseeable future - EG freelancers coming to the end of a contract with no likelihood of renewal

3. No new client referrals since March

 

 

Replies (13)

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RLI
By lionofludesch
29th Jul 2020 11:51

Any of those in isolation but you need to look at it as a whole, imho.

If you get a bad debt of £1000 but gain fees of £2000 for dealing with folks' furlough claims, I don't think you can say you've been adversely affected.

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Replying to lionofludesch:
Hallerud at Easter
By DJKL
29th Jul 2020 11:58

You have in the sense you have done more work and some of it is unpaid, if your example was bad debt £1,000 but extra work £1,000 you are adversely affected in the sense you have had to perform £2k worth of work for £1k of cash.

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Replying to DJKL:
RLI
By lionofludesch
29th Jul 2020 12:06

Surely you get £2000 cash.

Maybe bank transfer.

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Replying to lionofludesch:
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By Mr_awol
29th Jul 2020 12:23

lionofludesch wrote:

Surely you get £2000 cash.

Maybe bank transfer.

No, £2k is for the bank transfers.

Cash price is £1,500

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By Paul Crowley
29th Jul 2020 12:06

Have you spent time reaearching Covid stuff and answering Covid questions and sending Covid emails and letters? have you charged and been paid for all that work at your normal charge out rate ?

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Replying to Paul Crowley:
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By Mr_awol
29th Jul 2020 12:22

Paul Crowley wrote:

Have you spent time reaearching Covid stuff and answering Covid questions and sending Covid emails and letters? have you charged and been paid for all that work at your normal charge out rate ?

Personally I don't think that is being 'adversely affected' by Covid. There is an indirect link to the Virus but ultimately we have a duty to stay up to date on technical matters and will have shared knowledge with clients and others as a matter of client service, marketing, or just to share it with those who need to know.

To me it reads much more like an argument designed to justify the answer, rather than to answer a question.

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Replying to Mr_awol:
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By Paul Crowley
29th Jul 2020 17:30

Noone knows what adversely affected means until there is a reliable robust series of tribunals and appeal decisions.
The definition has been done to death on many threads, one of which has a comment from me saying done to death.
There were numerous Aweb live webinars on the subject inc Rebecca Bennyworth and I would look to rely on such as contemporaneous understanding by respected comentators if defending a client.
I am a director too so disinterested.
If selfemployed I would have claimed and kept records to justify

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By legerman
29th Jul 2020 12:34

Paul Crowley wrote:

Have you spent time reaearching Covid stuff and answering Covid questions and sending Covid emails and letters? have you charged and been paid for all that work at your normal charge out rate ?

I'm a Director rather than self employed, but a good point raised. So far I've only lost <£100 on fees. I've done quite a lot of free work assisting clients but that has been more than offset by the SBRR grant I got, so I'm one of the lucky ones and wouldn't have claimed the SEISS had I been able to.

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By legerman
29th Jul 2020 12:25

HMRC should have been more specific in my opinion but it's a judgment call as to where it crosses the line.

All my affected clients will receive an email just prior to the claims opening explaining the 14th July date and asking them to think carefully as to whether a claim will be justified, documenting the reasons why they're claiming if they do, but ultimately it will be their call. I believe HMRC will be srutinising a fair amount of claims at a later date, so it just protects them in the event that should happen.

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Replying to legerman:
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By andrewMo
29th Jul 2020 16:29

Thanks to you all for your helpful comments. I was hoping for some guidance in the [ hopefully unliklely ]event of an enquiry from HMRC resulting in repayment of the 1st claim.
In my opinion, it is quite easy to determine the other factors , eg Were you trading in 2018/2019. HMRC do give some examples on their website but they do not seem to relate to the services industry

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By mbee1
29th Jul 2020 15:03

What happens if the business has been adversely affected so, say, turnover up to the end of July is significantly down so the business receives the second grant. From, say, the autumn onwards when things are starting to get back to normal, the proprietor works flat out and, when it comes to finalising the accounts for the year, the turnover and potentially profits have actually increased over the previous year. What then?

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Replying to mbee1:
RLI
By lionofludesch
29th Jul 2020 15:21

You can only claim on the basis of the information you have at the time of the claim.

Mind you, I wouldn't advocate deliberately delaying work to support a claim because the amount of work you've delayed is part of the information you have in your possession.

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By Paul Crowley
29th Jul 2020 17:41

Where is the de minimus factor for adversely affected?
There is not any such limit.
In my opinion HMRC are really on a sticky wicket for anything other than the most flagrant abuse.
Accountants and agents were left out of both claim and repay systems for SEISS and justifiably as it is between the self employed and HMRC.

Not a wise decision by HMRC as a lot less claims would have been made.

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