Business Support - COVID-19
While the country remains in lockdown during the COVID-19 outbreak, farmers continue to work to produce food for the country. After all, for many farmers that I have spoken to, day to day life on the farm continues pretty much as normal, just perhaps with an extra footpath walker or two and some additional restrictions.
However, despite the daily jobs not changing, the market prices certainly are. Lamb and Beef prices have dropped over the recent weeks and a reduction in some milk contracts too. An extra worry many could do without at the moment.
The Government have been working closely with accredited lenders and banks to help businesses overcome the financial effects that COVID-19 will have and we are hearing that, on the whole, they are being incredibly supportive.
You will have no doubt heard much talk about the ways in which the Government are aiming to help businesses and the self-employed. Some schemes are still being ironed out, however there are several that have been successfully launched.
Yesterday there was some good news for the dairy industry. The government announced a new fund that will enable dairy farmers in England to claim up to £10,000 to help them overcome the impact that COVID-19 may have had on their business.
To receive this Government support, applicants will need to have lost at least 25% of their income over April and May due disruptions caused by COVID-19. It is hoped that the funding will help dairy farmers remain buoyant, especially those that have had to discard milk due to a decrease in consumer purchases.
We are yet to hear whether any of sectors of the industry will be supported in the same way.
More information can be found on the HMRC website, however, like many other schemes the details will be issued in due course.
If you furloughed any of your staff, you can now claim your Government funding through the HMRC website, via the Coronavirus Job Retention Scheme. The application is straightforward, and all the information you will need to make your claim should be readily available through your payroll software together with your business’ Unique Tax Reference number (UTR). However, the Chancellor is set to release an alteration to this scheme which is likely to reduce the subsidy from 80% to 60% and lower the cap from £2,500/month.
Business Bounce back loan
On 4th May, applications opened for the Business Bounce Back loan, whereby businesses who have been negatively impacted by COVID-19 can apply for a loan between £2,000 and £50,000. The main advantage with this loan is that you pay no fees, interest or repayments for the first 12 months. Once the first 12 months are over, there will be a ‘low level’ rate of interest for the remaining term of the loan. This is a great opportunity to gain some much-needed funds, at what seems to be a low interest rate.
Small Business grant Fund and Retail, Hospitality and Leisure grant Funds
There are also the Small Business Grants Fund (SBGF) and the Retail, Hospitality and Leisure Grant Fund (RHLGF) available to qualifying business who are paying business rates and are claiming either the Small/Rural Business Rate Relief or are in Retail, Hospitality or Leisure including farm shops and furnished holiday lets. Please note that farmers are exempt from business rates and are therefore not eligible for the grants on the farming business but may qualify with any diversified areas.
Local councils have issued letters, and recently reminders, to those they consider eligible to claim a £10,000 or £25,000 business support grant. The £10,000 grant is available to those businesses with properties, such as furnished holiday lets, that have a rateable value of less than £15,000. This could be really key to those relying on tourism and it is important to note that if you have more than one property, rated separately, then the grant is available on each property meaning that you could have a number of claims per business. If you have not heard from your local council then is it worth getting in contact with them.
If your holiday let, retail or hospitality business property has a rateable value of between £15,000 and £51,000 the RHGF grant is £25,000.
The grants are fully taxable, so it is worth bearing this in mind when budgeting for any tax liabilities in January 2022.
Self employed Income support scheme
The one area of Government funding that will be most relevant is the funding for the self-employed. Broadly, the funding is based on average profits for the previous 3 tax years, capped at £2,500 per month.
The government should be contacting anyone eligible from 4th May either by email, letter or text message. However, you can now check your eligibility yourself via the HMRC website. All you need is your Unique Tax Reference number (UTR) and your National Insurance number. If eligible, it looks likely that applications will open from 13th May, and once applied for, the grant funding should be paid within 6 working days.
Overall, despite the trying times, there is plenty of financial help available to ease the burden slightly. If we can be any help at all, then please do not hesitate to get in contact.
The content of this article is for general information only and does not constitute tax advice. It should not be relied upon and action which could affect your business should not be taken without appropriate professional advice.
Ellie Hammett ACCA
Ellie started with Evolution ABS in April 2010 and became a fully qualified as a Chartered Certified accountant in December 2015. Ellie manages a portfolio of agricultural clients and oversees the marketing committee.
Ellie grew up on her parents’ dairy farm in Dorset before her family moved to Devon in 1998. She now lives with her husband and little boy on the family beef, arable and sheep farm in East Devon.
In her spare time, Ellie enjoys helping out on the farm (although not so much the night-time lambing), spending time with her friends and the odd bit of retail therapy.
Since having her little boy, Ellie is in the office on Monday through to Thursday.