To be unsure whether to claim the self employment income support grant or not?

[SEISSquery]

Will try to keep it brief. I'm self employed (run my own craft business) and s single parent of a disabled primary age child and a teenager doing A levels. I claimed the first SEISS grant as all the events I usually sell at over the summer were cancelled.

However, I have managed to successfully build up the online side of my business over lockdown and sales are really good. I've just looked over my accounts for the first half of this tax year though and although business turnover is higher so far than at this point last year, my actual profit is down. This is a combination of factors, mostly Covid related.

Supply chains have been disrupted the costs of my materials have gone up, which means I'm paying out more for materials and also I'm bulk buying when I can get hold of things that are hard to find. I've introduced a couple of new ideas (subscription services) that have helped stabilise and hopefully future-proof my income to some extent, but these have involved significant extra outlay in bulk purchasing of materials to ensure I can fulfil orders even if supply chains are disrupted further (looking increasingly likely especially with no deal brexit on the cards ). I've also had to buy a dedicated work computer for managing online orders/spreadsheets etc as the family one (a basic indestructible type thing that we shared) was needed by my children for online work during school closure. I anticipated some of the bulk buying due to brexit and had booked extra events for this summer to try and up my income to cover costs, but obviously they were all cancelled. I've also managed to diversify slightly into a related area but this involved the purchase of an expensive bit of kit - over about 18-24 months this should pay for itself but right now it's a dent in my profits.

So from April 1st to September 30th, although my business income was higher than at the same point last year (by about £2k) I've only made an average of £45 a week profit. In theory this should significantly increase over the second half of the tax year as I now have the materials and equipment and more of the income from sales/work will be profit, but this only works if people carry on buying from me at the rate they have been - and that isn't certain at all, as job losses start and forlough ends etc. What I make and sell is very much a nice-to-have not an essential!

I claimed the first SEISS when things looked very uncertain for my business at the start of May and got £1300, so the second one would be about £1100. I don't know whether to claim it or not

WWYD?

Is this a trick question?

Just claim it if you're entitled to do so. Nobody can help with the internal wranglings of your mind and only you know how your business is doing

Claim it. Nobody can live on £45 a week. How are you surviving?

Or is the profit after you have paid yourself a wage?

Claim it. Your business has been negatively affected by Covid. Fuck knows if you don’t claim it, it’s not going to be sent to someone using a food bank instead so you might as well claim it and continue to trade better, pay more tax and help the economy in the long run...

There is going to be a lot of scrutiny and compliance around the SEISS in the coming months. If you are confident in your own mind that you can justify it then go ahead. No one knows what level of evidence will be required at the moment; the bar may be set pretty low and a reduced GPR year on year sufficient for you to pass any compliance check undertaken.

Loss of sales due to events not taking place is fine. However, I don’t personally think “people MIGHT now buy less from me because of less income” is a particularly strong justification.

Also, remember the computer is a capital rather than a revenue expense so won’t be treated the same as buying materials. And if you were able to invest in the capital structure of your business that contradicts (slightly) that the business was suffering.

I'm surviving because I get tax credits... And no, it's not after I've paid myself a wage - £45 a week is the average after costs that I've brought in so far this tax year. In previous years I've averaged more like £150 a week!

Claim whatever you can, that's what it is there for

Then what exactly is your issue? Do you need randoms on the internet to give you permission? You know you'll get idiots on here trying to make out you shouldn't claim for whatever reasons

The only question is whether you're "adversely affected" or not. No proper detailed guidance is given by Govt only some waffle about losing customers, higher overheads, etc which doesn't mention size of lost income, expenses, etc. From what you say, you have been "adversely affected" so claim it.

You should claim. Money saving expert website has a good breakdown of who is eligible, your scenario sounds like one I’ve seen on their site. Also hmrc have a free webinar (might be on YouTube) if you want to check.

Definitely claim it and do it today. I've told all my self-employed clients who were unsure to claim and use it as an insurance policy, we have no idea what is going to happen in a months time or even a weeks time.

Under those circumstances, you’d be daft not to claim it. For goodness sake, OP, there are wealthy people with money in the bank, claiming it, why shouldn’t you?

claim it

Claim it.

If it makes you feel better about it disrupted supply chains is one of the specific reasons on the .gov website.

I claimed the first as I had 0 income for at least a month.

I claimed the second as I had lost a client.

When they give the dates for the, much reduced, 3rd and 4th, I will claim again as the industry as a whole is not back to normal and my work is demonstrably less than this time last year.

It's not about needing "randoms on the internet" to validate me - I'm genuinely unsure about what to do. I've read up on it and the definition of "adversely affected" is pretty sketchy and woolly tbh. None of the scenarios I've seen as suggestions for when to claim/not claim seem to fit my circumstances very well! I don't have an accountant or anything like that to consult, I'm a sole trader and do all my own accounts etc.

Seeing Boris (I think it was Boris, if not him then another minister)say stuff about how the self employed can use their grants to cover costs if they have to self isolate makes me think surely potential costs or detriment to business must be an acceptable thing to consider when deciding? It's clear as mud, but I don't want to claim what I'm not entitled to.

I don't really know anyone who runs their own business, and the real life friends I've asked just tell me to claim it because why wouldn't I, but I'm not convinced that I'm entitled

Thank you for the answers though. I'll do some more research.

It's not about needing "randoms on the internet" to validate me - I'm genuinely unsure about what to do. I've read up on it and the definition of "adversely affected" is pretty sketchy and woolly tbh. None of the scenarios I've seen as suggestions for when to claim/not claim seem to fit my circumstances very well! I don't have an accountant or anything like that to consult, I'm a sole trader and do all my own accounts etc. My apologies for trying to help!

As a sole trader with no acountant, business adviser or mystical seer I too have to make up my own mind about my eligibility to claim SEISS.

So I read those same woolly guidelines, appreciated the fact that they aren't giving hard edged eligibilty criteria and chose to make a claim because my spreadsheet shows that I have not earned as much as I did this time last year.

SEISS has very loose criteria: did COVID effect your business?
Yes - I lost profit; had extra costs = claim it!
N0 - my profit stayed the same = don't claim it

They aren't assessing how much you lost, the SEISS can be more than the revenue you lost. THAT is why BJ expects you to use it to cover any isolation time you might need to take. And you will pay tax on it next year, so they will get some of it back!

It isn't the Moral Maze.

It's really quite simple. You said your profit margin is down? Claim SEISS 1 and 2.

For the extension, so far the criteria is less demand, make a claim!

Declare that they are impacted by reduced demand due to COVID-19 in the qualifying period. The qualifying period for the first grant is between 1 November and the date of claim

I'm sorry @CuriousAboutSamphire because your post was very helpful I was quoting another poster who had accused me of wanting randoms on the internet to tell me what to do!

My apologies for biting!

But do claim the bloody thing! AND the extension, which will only be 20% but still worth it if you have lost any income.

Do it today... RIGHT NOW! go on... Shoo!

My husband is self employed and claimed the first grant. He then had a heart attack and needed surgery in May, therefore cannot work due to having to isolate for the moment, so claimed the 2nd grant. His work has been effected by health and covid, so will claim the 3rd grant next month, although we know it is getting less each time. He has paid tax nearly 50 years and this is the first time claiming anything and he didn’t want to claim, but both myself and my 2 adult sons said that he should. It isn’t tax free, so will have to pay tax on the grants.

It is a worry that when they start going through it all they will decide they want it all back but it does sound like you are entitled. Let’s just hope they don’t decide to firm up the entitlements once they look into it, after being so woolly after claiming time.

One point: in reality your PROFIT hasn’t been hit, your CASHFLOW has.
The cost of bulk purchases etc will be spread over future sales. If you match cost to sales then your profit is unaffected, even though your cashflow has been. I would guess that as your cashflow has been adversely affected you clearly can claim.

Certainly make the claim ASAP. Why should you loose out when plenty of high-earners claim regardless?

Cashflow, that's the word. Thanks

It is

But you said in your OP that you'd had to sell in different places, bought different supplies that cost you more, so your profit margin has also been affected. That too is a valid reason to claim the SEISS.

You have more valid and measurable reasons to claim than you may have thought.

Spring they can't change the criteria in retrospect, and the wooliness is a positive thing, it makes meeting the criteria easy to prove.

I have kept a monthly sales sheet since I started. That is enough evidence for my claims.

It's really simple, a 14 column table:
Year : 12 x months : Total

Having a month with 0 sales was enough for my first claim.

Having about 2/3 the previous years sales was enough for the second.

They can't argue with those simple figures. During the lockdown months I sold/earned less.

When the 3rd round comes in I will see what the amended criteria might be... But I expect that simple table will be enough, again.

I only do simple, cash based returns, but I expect something that simple would be enough for anyone.

I am in a not dissimilar position, also with an online craft business, and although I claimed the first grant (I had massively reduced demand, and had to cancel international orders after so many flights stopped) I had been wobbling about the second grant. I met the criteria, with less ability to work because of child caring needs, and with increased costs but it didn't feel quite 'right', even though I was perfectly entitled. However, the issue was settled for me, as although the summer months picked up in sales, I have had the worst September since I started about a decade ago (it's usually a boom month). I would rather there was mechanism where you can claim for the amount you are short by, rather than 'all or nothing', but I can see how that would be a massive administrative issue for HMRC.

I hope you do claim, your case sounds solid. The Money Saving Expert Q&A guide is really helpful.