Opening of a second round of cash assistance for the self-employed
The second round of aid under the Self-Employed Income Support Scheme (SEISS) has been opened, offering a one-time grant of up to £ 6,750.
The system is open to the self-employed (including partners in a partnership) whose activity has been impacted by Covid-19 since July 14.
A one-time government grant of 70% of average monthly business profits over three months will be paid to those eligible for the program and subject to the above cap. Applications must be submitted by October 19.
“The eligibility criteria are the same as for the first round, but the payment is reduced, and those eligible must be contacted by HMRC to inform them of the availability of funding,” said Martyn Dobinson, partner of Accountant Saffery Champness .
Any claim suspected of having been wrongly made will be investigated by HMRC.
Figures released by the HMRC show that £ 201million was paid out to companies in agriculture, forestry and fishing for the first round, with an average claim amount of £ 3,200.
The data also revealed that only 59% of potentially eligible businesses in the sector had applied by July 31, the lowest proportion of any industry, with the education sector highest at 83%.
Eligibility requirements are the same as for the first round of funding, Mr Dobinson said, according to which applicants must:
- Be self-employed or a member of a partnership (and not operate through a business or trust)
- Were affected by the coronavirus outbreak on or after July 14, 2020
- Have negotiated in 2018-19 and submitted a tax return for that year by April 23, 2020
- Traded in 2019-20
- I intend to continue trading in 2020-21
- Have trading profits for 2018-19 not exceeding £ 50,000, which must be at least half of total income (if this condition is not met, the three-year average up to 2018-19 inclusive will be taken into account account).
The second condition is the key. “Meeting the rest of the conditions is an obvious fact, but have they been affected by Covid-19? Mr Dobinson said.
“Claimants will need to be able to provide commercial evidence of this fact, and HMRC will take any fraudulent claims seriously.
“How HMRC will verify claims is unclear. HMRC guidelines state that the applicant must make an honest assessment.
“Typically, being negatively affected will mean lower income or higher costs due to the coronavirus. “
Illness is part of the evidence
He said the evidence could include being sick with the virus, having had to self-isolate or protect himself due to the virus. Likewise, if staff availability has been an issue, or if supplies or sales have been affected, then this is clear evidence.
HMRC guidelines say there is no minimum threshold to be crossed, so there is a wide possibility of making a claim under the program, Mr Dobinson said.
“Based on this, I expect that many farmers have been affected in one way or another and should have a valid claim.”
Government loan deadlines
The Coronavirus Business Interruption Loan Scheme (CBILS) is expected to close at the end of September, while the Bounce Back Loan Scheme (BBLS) will close to new requests in November.
The plan provides for:
- Loan financing of between £ 50,000 and £ 5million for UK businesses with annual turnover of up to £ 45million
- 12 months of interest and fees covered by the government
- 12 month repayment leave if needed
- Loan term of up to six years.
The plan provides for:
- Debt financing between £ 2,000 and £ 50,000, up to a maximum of 25% of annual turnover
- 12 months of interest and fees are covered by the government
- 12 month repayment leave is available
- The loan term can be up to six years
- The closing date for new applications is scheduled for November 4.
“With the full impact of Covid-19 yet to be felt by many agricultural and rural businesses, these loan application deadlines may come too soon.
“Unlike funding under the Coronavirus Job Retention Scheme (CJRS) or SEISS, the loan funding will have to be repaid and, as a result, many will have attempted to negotiate this phase using their own resources without resorting to debt financing. urgency, as attractive as it is. may have seemed.
Additional funding needed
“However, as the crisis continues and the impact sets in, it’s likely that many will find that they will need to access this additional funding to stay afloat after all.
“Other factors affecting agricultural businesses, including weather conditions, the prices of inputs, such as fertilizers and feed, and fluctuations in market and commodity prices, may pose additional risk to these businesses. companies over the next few months.
Likewise, those who have diversified into other areas, such as events, vacation accommodation, attractions and tourism, for example, may not yet have felt the full impact of the virus. A seriously shortened season will pose a serious challenge in terms of turnover and profitability.
“Budgeting and forecasting cash flow has never been more important and will help determine whether there is a need to access finance through these loan programs, which could be crucial for many businesses as the winter months. is felt. There will certainly be rural businesses that will need to take advantage of all possible support measures available. “
If it was possible for these two loan programs to be extended, anyone wishing to qualify for this funding should take advantage of it during the programs’ previously announced lifespan and apply on time, Dobinson advised.