Editorial team AccountingWEB.co.uk
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Any Answers Answered: Trading income allowance vs SEISS grant


As ever TaxTV’s Tim Good and Giles Mooney look at a couple of questions from the pages from Any Answers. This month the conundrums concern trading income allowance vs SEISS and the reduction of share capital.

14th May 2021
Editorial team AccountingWEB.co.uk
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To view the full questions and AccountingWEB reader answers click on the links below:

Trading income allowance vs SEISS grant

AccountingWEB reader Thorsten Orr asked: “A client of mine received nil self-employment income for the year, and incurred very few expenses (£200 or so). The client has received £4,715 in SEISS grants. 

“Is it possible to claim the £1,000 trading income allowance?”

Reduction of share capital

The next question comes from AccountingWEB reader Mikeyban. 

“I have a very old company which has been passed down the generations and is now owned by the son solely...I have been acting for the last few years and there is £45000 of share capital and approximately £15,000 profit reserves.

“Would it be possible to reduce down to say £100 share capital and I presume the difference would be transferred to the profit and loss and there would be no tax implications. These can then be used for dividends?

“I believe there must be a declaration of solvency from the director... Is there anything I have missed?”

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Replies (1)

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By Irwin560
20th May 2021 10:48

You cannot claim the grant if you trade through a limited company or a trust. no more than £50,000 and at least equal to or more than your non-trading income. If you claim Maternity Allowance this will not affect your eligibility for the grant.


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