SEISS - 2nd payment

[Sharpend]

Does that mean you can go back to work now? 

 

[SPECIAL LOCATION]

Does that mean you can go back to work now? 

Never not be able or available to do any work customers are willing for me to do... 

(and have continued to work as and when agreeable with customers in accordance with Gov social-distance guidelines etc..)

Just as with those furloughed from their main employer...

They have always been entitled and allowed to do any additional employment they can obtain to supplement their income..

SEISS is a grant to assist business that are still trading but have been been "adversely affected" 

Nothing at all to do with stopping then restarting work...

https://www.gov.uk/guidance/decide-if-your-business-has-been-adversely-affected-for-the-self-employment-income-support-scheme

From the Gov.uk guidance:-

"Adversely affected is typically when your business has experienced lower income or higher costs due to coronavirus."

"There is no minimum threshold over which your business’ income or costs need to have changed."

"you’ve had to scale down, temporarily stop trading or incurred additional costs because:

your supply chain has been interrupted

you have fewer or no customers or clients

your staff are unable to come in to work

one or more of your contracts have been cancelled

you had to buy protective equipment so you could trade following social distancing rules

If your business recovers after you’ve claimed, your eligibility will not be affected."

Unless you are a self-employed Amazon or Tesco's on-line delivery driver etc...

Then I would guess loads of small businesses have been "Adversely affected".

At the end of the day HMRC have all of my Tax Return info for the past 20+ years, since I went self employed in 1999..

It won't require a degree in rocket science to figure if my income has been adversely affected in 2020 or not...

And as there is no obligation to keep monthly accounts to compare month-by-month, year-on-year, there is a element of gut-instinct to decide if you think things are different to previous years..

The reality is it wont be till I finally do my 20-21 Tax-return that I would be 100% sure of any overall affects..

So IMHO better to claim with the risk of having to pay back..

Than to not claim for something you are entitled to.

Guinness             

 

[Sharpend]

Never not be able or available to do any work customers are willing for me to do... 

(and have continued to work as and when agreeable with customers in accordance with Gov social-distance guidelines etc..)

Just as with those furloughed from their main employer...

They have always been entitled and allowed to do any additional employment they can obtain to supplement their income..

SEISS is a grant to assist business that are still trading but have been been "adversely affected" 

Nothing at all to do with stopping then restarting work...

https://www.gov.uk/guidance/decide-if-your-business-has-been-adversely-affected-for-the-self-employment-income-support-scheme

From the Gov.uk guidance:-

"Adversely affected is typically when your business has experienced lower income or higher costs due to coronavirus."

"There is no minimum threshold over which your business’ income or costs need to have changed."

"you’ve had to scale down, temporarily stop trading or incurred additional costs because:

your supply chain has been interrupted

you have fewer or no customers or clients

your staff are unable to come in to work

one or more of your contracts have been cancelled

you had to buy protective equipment so you could trade following social distancing rules

If your business recovers after you’ve claimed, your eligibility will not be affected."

Unless you are a self-employed Amazon or Tesco's on-line delivery driver etc...

Then I would guess loads of small businesses have been "Adversely affected".

At the end of the day HMRC have all of my Tax Return info for the past 20+ years, since I went self employed in 1999..

It won't require a degree in rocket science to figure if my income has been adversely affected in 2020 or not...

And as there is no obligation to keep monthly accounts to compare month-by-month, year-on-year, there is a element of gut-instinct to decide if you think things are different to previous years..

The reality is it wont be till I finally do my 20-21 Tax-return that I would be 100% sure of any overall affects..

So IMHO better to claim with the risk of having to pay back..

Than to not claim for something you are entitled to.

Guinness             

exactly my thoughts, mine arrived Monday  

 

[ProDave]

When you apply you are told to confirm your business has been adversely affected "after July 14th" and keep proof of that, which sounds like you may be asked to justify it.

I do my accounts on a cash basis, i.e. it goes in the books on the day the transaction happens.  It is easy just to look through and add up all incomings and outgoings for any months and see how that compared to the average for a normal year. 

 

[Sharpend]

Not sure I quite agree Dave, you don’t buy the same stuff each month, so expenses will always be changing. I have had to purchase an endless supply of face masks etc so I have no qualms about having the grant as it states there is no minimum threshold of expense in order to claim. :C  

 

[Murdoch]

I’m amazed how many trades people don’t do monthly cash accounting

 how do they know how much to take as a salary how much to save for their taxes?

i run quick books so I can always see my profit .....

 

[ProDave]

Agreed a 1 month snapshot is not a good indicator.  e.g. my April figures looked very good, because I got paid for several jobs done in March, before the demand dried up, and because demand had dried up, I spent almost nothing on materials.

I think it was June that showed a negative income as I had started buying materials for jobs that were starting to come in, but of course not got any income for them yet.

The end of year figures will be interesting, and at the moment I still don't have a feel for whether they will be up or down on a normal year.  Some jobs are starting to come in now, but I am still seeing people not wanting you in their houses, e.g my next 2 jobs are power to two summerhouses, both at different locations.

 

[Murdoch]

^^ 

not sure I agree

 i only buy kit in the month I need it and on big jobs I invoice twice a month

 meaning I rarely carry costs from one month into the next.

 In thinking that cash isn’t the way I account using QB as I use invoice numbers ( in or out)

 as for overheads, mine run at about £500 per month 

 

[SPECIAL LOCATION]

Whatever additional information you choose to retain for your own business budgeting, management etc..

does not alter the fact that there is no legal obligation to have to keep monthly trading figures as a self employed small business.

All you have to keep evidence of is 12months worth of income and expenditure, which could be just piles of receipts stuffed in a box-file! 

Therefore if HMRC insisted you provide monthly evidence to verify an SEISS payment..

then that in itself would become an additional cost/time expended to extract the information, due to COVID, that you could claim you wouldn't normally have been doing!

(further adverse affects!)

I run my tax-year to match the HMRC tax-year Apr->Apr.

HMRC have calculated my entitlement on average monthly profit based over 3 years of trading, when economic conditions were, 'very', different..

And those figures don't even include the 2019/20..  (as that may or may not have been filed as yet).

They are from tax years  2016/17, 2017/18, 2018/19

and even before COVID came along most financial gurus were talking of the "Brexit" effect of many businesses..

So assuming you haven't been on a big roll, making more money than ever..  

how could anyone prove categorically that any profit fluctuations are due to COVID / Brexit / Stroppy customers getting you to replaced failed LED's FOC! etc.. etc..

Or what if you'd had a bad pre Christmas and New years trading, (Oct 19 to Jan 20), made far less than normal, and the COVID lockdown period had actually been higher than normal,

but leaving an end of year average could still be down, but not due to COVID !

I am still finding some supplies low and/or longer delivery times on certain items, due to COVID impact on suppliers, which influences how efficiently I can work! 

Printer ink (and printers) have become a rare breed recently!

Unlike some businesses, (e.g. hairdresser),  a lot of our work is not completed the same day,  the same week, or even the same month...

So again it will be very common for materials to be purchased and work done, that will not be finally complete and all paid up in the same calendar month...

All of these points leave a gaping barn door, wide enough to drive a coach & horse through, if trying to prove / disprove what the financial impact COVID has been.. :C

While there are various perfectly acceptable methods to document and record your business account information..

the bottom line fact is at the moment HMRC only require you to submit final end-of-year figures!!

Assuming you haven't been claiming on or near the max permissible amounts of grant,

then I am not sure HMRC would have the time or resources to go investigating or chasing SEISS payments for minimal return..

(You are going to be paying Tax on the amounts anyway!)

For my own personal information I am more interested in individual customers statistics

e.g.

Quantity and value of work done, dates work is quoted, commenced, completed, paid etc..

Any work quoted but rejected..  

How many new customers I gain each year..

Where they got my contact details from to asses value of advertising promotion etc..

The actual monthly revenue figures don't tell me the full picture of what's really going on due to the monthly overlaps.

Consider this coming bank holiday weekend...

I will be completing a job on Friday..

If customer pays me on my Card terminal, (which they have done previously)..

Normal gets into my bank 2-3 working days later.. But Bank-Holiday Monday could add a bit more delay..

So materials bought in August.. Customer paid in August.. But I don't see or have access to any money in August!

My payment terms are 10days from date of invoice following completion of work, and although many customers pay same day,

some do a bank transfer a few days later, especially if its near their pay-day at the end of month..

So overlaps can be quite a common occurrence..

Personally I use various spread-sheets for all my business records to store all the info I need..

I created four key sheets which I can manipulate to sort view edit or print almost anything I want by Year/Month/Account/Customer.. etc..

(Recently tweaked the sheets to include data for my Card-payment terminal, as you have the percentage deducted per transaction..

i.e. Customer pays £xx.xx,  I get £yy.yy,  Card provider gets £zz.zz )

1/ Customer Contacts sheet with a Customer-ref-Number/Names/Address/Phone/ No of jobs complete/ Total value of all jobs done/ How they found me etc..

2/ Jobs sheet with Job No/Year/Cust Ref No/Dates quoted/start/end/paid/Original quoted cost/Final paid cost etc..

3/ Accounts sheet with all Bank accounts/Credit-Cards/Wholesaler Accounts/Card-Payment account/Pension/Gas-Electric/Loan(s)/ISA's/HMRC payments/Standing orders-Direct debits etc..

4/ Tax return sheet.. where all of the relevant stuff from the above can be crunched & stored before going on-line to submit my tax return.

These sheets record all the data going right back to when I started Self Employment in Feb 1999.

So if I wanted to I could compare a whole bunch of stuff..

By month/account/customer/job/year/postcode areas etc.. etc.. etc.. etc..

But HMRC, don't need to know what information I have access to..

Just the stuff I am legally obliged to report to them.

:coffee

 

[SPECIAL LOCATION]

 how do they know how much to take as a salary how much to save for their taxes?

With 21 years of trading figures available I have a fair idea of the average Monthly/Yearly, Turnover/Profit/Tax due...

So just set up a Direct Debit to shift the average monthly Tax (and Nat Insurance) amount into a separate account so its ready on one side..

If you get that gut feeling a year is going better/worse than normal, its easy to go in and adjust accordingly.. 

I actually do my Nat Insurance direct to HMRC as up until 2015  it went out as a 4 or 5week payment anyway!

(And you wont earn a fat lot of interest keeping it anywhere yourself!)

Guinness

 

[Murdoch]

Consider this coming bank holiday weekend...

I will be completing a job on Friday..

If customer pays me on my Card terminal, (which they have done previously)..

Normal gets into my bank 2-3 working days later.. But Bank-Holiday Monday could add a bit more delay..

So materials bought in August.. Customer paid in August.. But I don't see or have access to any money in August!

That's irrelevant. 

The kit you buy is on your trade account with 30 days to pay month end.

Your business account has cash in it

And your actual cash arrives on Monday

I don't see the problem you think you have

 

[SPECIAL LOCATION]

That's irrelevant. 

The kit you buy is on your trade account with 30 days to pay month end.

Your business account has cash in it

And your actual cash arrives on Monday

I don't see the problem you think you have

I don't have a problem,

I was just pointing out that real-time monthly costs can show a skewed apparent lower or higher profit than the real overall job cost yearly figures give.

Hence as Pro-Dave pointed out, until you sit down and compare your final yearly averages, it can be difficult to fully identify the level of impact the "Covid-Factor" has had on your earnings..

Which if you haven't claimed any grant by then you have missed the boat!

Also some of your assumptions are incorrect...

Whilst you may have the privilege of only using suppliers who you have accounts with....

and never have any cost roll past one month to the next..

i only buy kit in the month I need it and on big jobs I invoice twice a month

meaning I rarely carry costs from one month into the next.

In reality it is common for outgoings from one month to relate to work done & income earned from another month

Especially if you have purchased those items from a supplier who you don't have any trade account with.

I certainly don't have have a trade account with every single supplier I have every used..

(And.. for those accounts I do have I don't always leave it till the final due date to balance any outstanding debts.)

This week I have purchased some items from TLC-Direct, for two jobs straight out of my business account using the business Debit card..

(for the occasional quantities I purchase its not really much point setting up a trade account.. and/or I have never checked if TLC do offer trade accounts!)

Parcel arrived today.. so now organising times to go and fit the items purchased... 

I am currently waiting for a reply from one of customer as to when it is convenient to installed those items... and then get paid..

But its quite likely those outgoing will not relate to income received this month..

And as I have been on holiday for a fair chunk of August.. 

This month will have far more outgoings proportional to income.. 

and Sept will generally have a disproportionate level of income to expenditure..

So monthly snap-shop profit figures can be misleading!

And each of the SEISS payments are to assist with a three month period of earnings... one 80% other 70%

i.e. a total grant of 75% worth of average profit for 6months if you have been affected, with NO THRESHOLD on the level of impact on your trading..

So until you can see the full extent of those two three month periods..

You have to work on a bit of gut instinct and feel for how things are going, whether you decide to claim or not!

{p.s. I am not VAT registered so there is minimal need to use any brand-name accounting packages..

as its not that hard to set up a spread sheet to record all you need. }

Guinness