COVID-19: Practical guidance for our rural and farming clients #13

Last week we reported on the opening of the new Local Authority Discretionary Grant.

We have farming and rural business clients who operate additional small/micro businesses but are not eligible for the hospitality or small business grants.  The discretionary grant fund is aimed at supporting these businesses who are adversely affected by COVID-19.

This is a reminder that there is only a two-week window to submit your application into your County Council finishing on 14 June 2020. 

This grant can apply to any small and microbusiness with fixed property costs and could be worth £25,000, £10,000 or any amount under £10,000.  Councils will review all applications and determine who gets the grant, so you need to make sure your application gives you the best chance of success. You are welcome to contact Old Mill if you need help with this.

Authorities will be prioritising the following types of businesses for grants from within this funding pot:

• Small businesses in shared offices or other flexible workspaces. Examples could include units in industrial parks, science parks and incubators which don’t have their own business rates assessment;
• Regular market traders with fixed building costs, such as rent, who don’t have their own business rates assessment;
• Bed & Breakfasts which pay Council Tax instead of business rates; and
• Charity properties in receipt of charitable business rates relief which would otherwise have been eligible for Small Business Rates Relief or Rural Rate Relief.

It’s worth noting that those who have received cash grants such as the Dairy Hardship Fund are ineligible for funding from the Discretionary Grants Fund.

Farmers and rural businesses eligible for the SEISS will be able to claim a second and final grant in August.

• Applications for the second grant will open in August. Individuals will be able to claim a second taxable grant worth 70% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total
• Individuals can continue to apply for the first SEISS grant until 13 July. Under the first grant, eligible individuals can claim a taxable grant worth 80% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £7,500 in total. Those eligible have the money paid into their bank account within six working days of completing a claim
• The eligibility criteria are the same for both grants, and individuals will need to confirm that their business has been adversely affected by coronavirus. An individual doesn’t need to have claimed the first grant to receive the second grant: for example, they may only have been adversely affected by COVID-19 in this later phase. Further guidance on the second grant will be published on Friday 12 June.

Full details and our review of the scheme can be found here

While farmers may not have been as affected by the need to furlough staff compared to other industries, we have seen some rural businesses take advantage of this government aid. Last Friday (29 May) the government announced the following updates to the scheme:

• From 1 July businesses will be given the flexibility to bring furloughed employees back part time
• Individual firms will decide the hours and shift patterns and will be responsible for paying their wages while in work
• From August 2020, the level of government grant provided through CJRS will be tapered and business will be asked to contribute a modest share.

The following will apply for the period people are furloughed:

• June and July: The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything
• August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed
• September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed
• October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.

Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

Full details and our review of the scheme can be found here

Join us this Friday live at 9am as we welcome Rural Accountant and Director, Richard Haines, and Rural Tax adviser, Catherine Vickery.

Richard and Catherine will be discussing all the current client questions and new announcements regarding COVID-19 and the business implications and opportunities for farmers and rural businesses.  We will also discuss managing cash flow, options still available for grants and funding, and utilising your banks.

You are welcome to submit questions during the event using the question box on the right of your screen or beforehand to marketing@om.uk.

Click here to join our rural ‘Virtual Breakfast’ Q&A this Friday 5 June at 9am.

The link will direct you to a secure Microsoft Teams page.  Here you can click the box ‘watch on the web’ which will give you entry without having to download any software.

If you have any problems accessing the event, please let us know by contacting marketing@om.uk.