COVID-19: Practical guidance for our rural and farming clients #21

Those working self-employed within farming over the last few months have fewer instances of lost work compared to other industries, but there are still a number of our clients who have been adversely affected and qualify to claim support.

Applications for the second and final income support scheme for the self-employed (and for members of a partnership) will open from 17 August.

This second and final taxable grant will be calculated as 70% of three months of trading profits, up to a maximum of £6,570. As with the first grant, HMRC will contact you if you’re eligible.  You don’t need to have claimed in the scheme in order to claim the second and final grant.

Applications for the grant will be made in the same way as the first by using your online government gateway account.  As with the first grant, Old Mill will not be able to submit these claims for you, but we will be happy to assist with any guidance, questions or reviews of grants you may have.

We also advise that you record dates and keep evidence of how your business has been adversely affected by COVID-19 in case it’s needed for future assessment.

Taxpayers who have received SEISS grants are being urged by HMRC to doublecheck their entitlement as there is only a 90-day period from receiving the grant to inform HMRC of any overclaimed amounts before penalties arise.

We envisage there will be very few instances of this within the farming community but if you have claimed in error and received the grant:

• before 22 July 2020 you must tell HMRC on or before 20 October 2020
• on or after 22 July 2020 you must tell HMRC within 90 days of receiving the grant.

Full guidance from HMRC can be found here and your Old Mill adviser will be available to help where required.

The Dairy Response Fund, a scheme set up to help the dairy farmers worse affected by the COVID-19 outbreak disruptions has extended the application entry deadline to midnight on the 11 September.

To be eligible you must demonstrate that you have suffered a reduction in the average price paid for your milk of 25% or more in April 2020 when compared with February 2020. If you’re eligible, the fund will cover 70% of your losses up to £10,000.

Given the qualification criteria, there has been little take up from dairy farmers.  However, our dairy clients are continuing to experience repercussions from the coronavirus environment, if you feel you have been adversely affected by COVID-19 and need financial assistance, please contact your Old Mill adviser to talk you through all financial options available to you.

The government is introducing a new Job Retention Bonus to provide additional support to employers who keep on their furloughed employees in meaningful employment after the Coronavirus Job Retention Scheme ends on 31 October 2020.

The Job Retention Bonus is a one-off payment to employers of £1,000 for every employee who they previously claimed for under the scheme, and who remains continuously employed through to 31 January 2021. Eligible employees must earn at least £520 a month on average between 1 November 2020 and 31 January 2021. Employers will be able to claim the Job Retention Bonus after they have filed PAYE for January and payments will be made to employers from February 2021.

Full details and how to claim can be found on the HMRC website here.  Your Old Mill adviser will also be able to help.

A new law came into force on 31 July 2020 that ensures if a furloughed employee is made redundant they are entitled to receive redundancy pay based on their ‘normal’ wage and not on the reduced furlough rate.

Employees with more than two years’ continuous service who are made redundant are usually entitled to a statutory redundancy payment that is based on length of service, age and pay, up to a statutory maximum.

There has been reports that a minority of employers are using the furlough reduced pay (80% of normal pay, capped at £2,500 per month) to calculate any statutory notice and redundancy pay. As of 31 July onwards, this method has become illegal.

Many farms who have diversified into hospitality, and rural businesses providing eating establishments, are now benefiting from the Eat Out to Help Out Scheme which came into effect at the beginning of August.

Be aware that if you have registered for the scheme and are currently offering scheme discounts to diners you have up to and including the 30 September to make up to five claims after which the claim window finishes.

Currently you can make a claim after seven days from the date you registered, and you can only claim for scheme discounts you offered on or after the same date. Full details can be found here and HMRC have produced a list of examples of how to work out the total amount of discounts here.

HMRC has stipulated you must submit the claim yourself but, as ever, Old Mill is here to help with any guidance or questions you may have.

For more information, or if you have any questions about any of the above, please contact your Old Mill adviser or email enquiries@om.uk.