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SEISS round 3 - would you apply in my position?

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 Jamie Wakeham 11 Jan 2021

I am genuinely torn about applying for the third round of SEISS, and I'm interested to see what others would do I my situation.  Apologies for long post but I want to be very clear.

I'm self-employed, and I work partly as a private tutor, partly as a supply teacher and partly as a climbing instructor (income is typically split about 75:10:15).  Much of the climbing work is delivering a series of ropework courses for my old mountaineering club, between November and February.

In March of last year, my tuition work unsurprisingly vanished overnight.  The Y11s and Y13s who make up most of my client base didn't want to continue to cram for exams that were cancelled, and the remaining Y10s and Y12s were so sick of being online all day that the last thing they wanted was to see me online at 6pm!  There was no supply work to be had and climbing instruction was also impossible.  My income fell to about 5% of normal in what would have been the busiest part of my year.  I applied for SEISS rounds 1 and 2, which did exactly what they were supposed to - they paid out for six months in total, giving 80% and then 70% of my average income.  I am incredibly grateful for this, and I am very aware that there are a huge tranche of people who unfairly didn't get SEISS.

The summer was fairly quiet - I had a few tuition clients who wanted to catch up on the largely lost six months of teaching, and  a tiny bit of climbing work.  In September work picked up fairly well - I had a fair number of exam-year clients who wanted to get ahead in case things went to crap again, and I also picked up a small supply job for the academic year with a local school who'd misplaced a physics teacher.  On top of that, I was asked to deliver more than normal the amount of ropework courses - the other instructor who sometimes does them alongside me declined to take any on this year.

Then, of course, comes the tier system and then the latest lockdown.  Of the £1100 worth of climbing courses I'd been booked for in late 2020, I only delivered £300 worth.  There was a strong expectation I would then be booked for a further £800 or so of courses early in 2021.  I've also just found out that now schooling is back to online only, I'm not needed for most of the next two weeks, and I'm down £500 on that.  There's also the beginning of private clients starting to pull out after the announcement that GCSE and A levels are off again.  So I am provably down £1300, and I have a reasonable belief that my drop in income in this period will be £2000 or more. 

So here's the dilemma.  I can go press the button in my HMRC account to release SEISS round 3, and with no further checks or queries, I will get about £6500 dropped into my bank account.  There is no way for me to say to HMRC that I don't want it all - it's all or nothing.

HMRC say this: "In order to claim, you must reasonably believe that you will suffer a significant reduction in trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus during 1 November 2020 to 29 January 2021. Before you make a claim, you must decide if the impact on your business will cause a significant reduction in your trading profits for the tax year you report them in. HMRC cannot make this decision for you because your individual and wider business circumstances will need to be considered when deciding whether the reduction is significant."

I am quite confident that I will be about £2000 worse off because of Covid.  Does that mean I should take the £6500?  I have been prudent and have decent savings, and can ride out the missing £2000, but does that make it 'not significant' to me?

My other concern is that in the future, HMRC come and ask why my profits look £4500 up on the year... I've never been audited and I do not fear it (I declare 100% of my income and pay my fair taxes) but I suspect it would be a bugger of a faff if they did want to look at everything.

What would you do?  I think if I do take it, I will then make some pretty significant charity donations with the excess. 

Like = take the grant, dislike = don't.

 marsbar 11 Jan 2021
In reply to Jamie Wakeham:

Take it. It’s not your fault the system can’t calculate individual amounts and it would probably not be cost effective to do so.  Put the money for charity somewhere safe just in case if you are worried and donate it in the future.  Maybe spend some of it with instructors who haven’t got the money.  

 mrphilipoldham 11 Jan 2021
In reply to Jamie Wakeham:

Take it. You can always return the 'overpay' to HMRC if you so wish. Or set it aside to pay for inevitable tax hikes in the coming years...

 Jmacquarrie 11 Jan 2021
In reply to Jamie Wakeham:

Take it, I'm in a similar position (albeit a different sector of work), although I had a good late summer and autumn so I didn't take the second grant.

As has been mentioned you can repay some if you really feel you want to.

In reply to Jamie Wakeham:

Take it and put it aside as you may well need it later on judging by how badly the government are handling the virus! Out of interest, since day 1 how will you be compared to what you would have earnt in total i.e. does the £4.5k extra effectively compensate for only being at 70/80% earlier on?

 TechnoJim 11 Jan 2021
In reply to Jamie Wakeham:

Take it. You don't know what's going to happen, the vaccine rollout could hit an unexpected bump, lockdown could rumble on in one form or another for months, etc. 

The government's handling of this crisis has contributed enormously to the ongoing economic impact. Don't feel guilty for taking the help that's been offered. If you're doing OK, help someone who isn't, even if you just spunk some money at local businesses.

In reply to Jamie Wakeham:

As a climbing instructor who didn't qualify for SEISS, and somebody who has spent the majority of the year relying on Universal Credit, I'd take it without question! 

As others have said, who knows what could happen with vaccine rollout, further lockdowns, other variants. The outdoor instruction sector will struggle for the next few years, so to me it seems like a good opportunity to put some money to one side just in case!

 Jamie Wakeham 11 Jan 2021
In reply to all:

Thanks - that does seem pretty unequivocal (it's 27 to 2 as I type).

It has struck me that there's already some complicated calculations happening here - their system is looking over my last three tax returns, adding them up and dividing by 36 for an average monthly income, multiplying that by three and then finding 80%.  It surely wouldn't have been that hard to add an extra stage of 'pay this amount, or pay whatever they put in that box if it's lower'?  I'll not be the only person who's claiming an amount in excess of what I know I've lost.  Hey ho.

I do like the idea of making an effort to spend this with other local firms who have lost out (and will make some substantial charitable donations as well).  Mind you, putting a couple of grand in a disaster account for later on does seem prudent...

Toerag - good question.  Round 1 was quite harsh for me because reimbursing me for average months (the exam season means March, April and May are my biggest earners by far) was a huge underestimate.  However round 2 (covering June/July/August) was an over-estimate because they're usually pretty quiet months for me.  Overall rounds 1 and 2 more or less averaged out and my total actual income (including SEISS) was pretty similar to the previous year.  So this 'excess' £4500 really is beyond what I feel entitled to.

Of course, if there is a round 4 (it seems there will be) then I can simply choose not to claim it, if my Covid losses are below £4500.  That would deal with things neatly enough.

In reply to Jamie Wakeham:

Take it, put it somewhere safe, worry about it when we're totally out of Covid (or just into an annual vaccination) and you're back to your normal financial cycle.

Just in case HMRC ever ask any questions - keep all records - but from your OP I guess you're doing that already.

Post edited at 19:37
In reply to Jamie Wakeham:

> a local school who'd misplaced a physics teacher

Have you been disposing of the bodies in the river again?  The C&RT foks hate it when you do that

 girlymonkey 11 Jan 2021
In reply to Jamie Wakeham:

I believe we are already promised a hike in our national insurance, so keep some for that! 

It is designed to cover loss to your business, which by my reading means that it doesn't apply to any PAYE earnings as these are not your business. Whether you feel it is ethical to take it on these grounds or not is another question, but in the case of an audit, I think you are covered. The ideas about your own emergency fund and giving to charity are both good ones if you want to do that.

In reply to Jamie Wakeham:

Don't take it. Donate to the Conservative party and start a PPE company. A few thousand or a hundred million? Obvious choice. 

 Jamie Wakeham 12 Jan 2021
In reply to girlymonkey:

Ah - when I work as a supply teacher I generally just invoice the school as an outside contractor, rather than going onto their payroll, so I'm never PAYE.  It's less pension effective for me, but a hell of a lot simpler!

In reply to Niall_H:

Gotta drum up trade somehow...

In reply to Jamie Wakeham:

Take it while it is going.  This could easily get worse or it might take longer for your business to recover than expected.   There might not be anything available later when you actually need it.

In reply to Jamie Wakeham:

Just to note that the SEISS is taxable, so assuming from your posts that you are paying tax, then some of the extra will go back to HMRC anyway at some point.  I'm in the same boat and have taken the offer so far, but am likely not to take the next one (four) as my earnings have returned to something approaching normal, though I have had to do all sorts to make up the gap.  My SEISS was substantially lower that the earnings I was on at the time - a legacy of a transitional year featuring in the last three years calculation, so for me it has felt incredibly helpful, but still necessitated some adjustments.

Nice to see a thoughtful post raising interesting dilemmas.  

 Paul at work 12 Jan 2021
In reply to Jamie Wakeham:

Its going to feature in your tax return, when you do your self assessment, so take it. The wording on the 3rd sum is something like 'can prove that you have lost business and COVID has effected or is going to effect your projected income' What you have described is showing that you have lost business....

 Rick Graham 12 Jan 2021
In reply to Paul at work:

> Its going to feature in your tax return, when you do your self assessment, so take it. The wording on the 3rd sum is something like 'can prove that you have lost business and COVID has effected or is going to effect your projected income' What you have described is showing that you have lost business....

The wording for seiss 3 is significantly different to seiss 1+2.

After careful reading, as my expected turnover ( including Seiss 1+2) will be slightly more than last year, I have not claimed seiss 3.

80% of turnover with fewer expenses is not bad for sitting at home for some self employed . Interesting how businesses , such as large supermarkets , have returned business rate reliefs as they have not been impacted by the pandemic and do not want to be seen as benefiting from it.

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