Old Mill Updates

COVID-19: Practical guidance for our rural and farming clients #23

This week in our rural update:

  • Growth Support Kickstart Grant scheme is now open for applications
  • COVID-19 business support schemes still available
  • Five key dates for farmers’ cash flow over the next 12 months
  • Government announce Capital Gains Tax review

If you have any questions about any of the below please do get in touch with your adviser in the first instance, or alternatively click here…

16th September 2020


Growth Support Kickstart Grant scheme

A government Growth Support Kickstart Grant scheme has now opened for applications.  Businesses can now apply for grants ranging from £1,000 to £5,000 with the aim of receiving the following support in recovering from COVID-19:

  • Specialist professional advice from accountants, human resources or solicitors.
  • Adopting new technology and online systems
  • To purchase new equipment

The full grant funding will come from the government with no obligation for businesses to contribute financially but there will be an expectation in the application process for businesses to demonstrate how they have been adversely impacted by COVID-19.

The grants are administered through individual Local Enterprise Partnerships (LEP) with each LEP having its own application process.

Applications from those operating in primary production will not be accepted which means that a large proportion of agricultural businesses will not qualify.  However, many diversified and tourism businesses will be eligible.

There has been a large demand for this grant, with some LEPs already closed for further applications.  However, it’s expected that applications will reopen depending on the LEP and most are still open for expressions of interest.

If your business has been affected by COVID-19 and is eligible for the Growth Support Kickstart Grant scheme then please get in contact with your Old Mill adviser who can talk you through a range of our services that qualify for grant funding.


COVID-19 business support schemes still available to farming and rural businesses

Below is a list of relevant government COVID-19 business support schemes for rural businesses.  If you think your business qualifies for a scheme, please feel free to get in contact with us and we can talk you through the processes, deadlines and options.

 

Self-Employment Income Support Scheme (SEISS)

Direct financial support for self-employed individuals (and for members of a partnership).

The first grant deadline has passed, the second and final grant can be claimed up until 19 October 2020.

  •  You must have filed a 2019 self-assessment tax return, if you haven’t done so you will be ineligible to access this scheme
  • This isn’t a loan and therefore you don’t have to repay
  • Only open to those with total self-employed earnings below £50,000;
  • and where those earnings account for more than half of their total income
  • For individuals trading in partnership it’s their share of partnership trading profits that must be below the £50,000 limit
  • This is worth 70% of average monthly trading profits for three months capped at £6,570 total over three months
  • The second grant is for those who continue to be or are newly adversely affected by COVID-19 from 14 July 2020. You can claim the second grant even if you didn’t claim the first.
  • This grant will count towards EU state aid limit *
  • This grant will not count towards De minimis aid limit **
  • If a business makes an overall profit once the grant income is included, it will be subject to tax.

Visit the government webpage on the Self-Employment Income Support Scheme for more information.

 

Bounce Back Loan Scheme (BBLS)

Loans up to £50,000 available.

  • The deadline for the scheme: open until 4 November 2020
  • For small and medium-sized businesses
  • Borrow between £2,000 and up to 25% of turnover to a maximum of £50,000
  • 100% loan guarantee from the government
  • No fees or interest to pay for 12 months
  • Post 12 months, interest rate 2.5% a year
  • Length of loan, six years, no repayment due for first 12 months
  • Businesses must have been adversely impacted by COVID-19
  • Businesses can’t apply if they are already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) or Corporate Financing Facility
  • This loan will count towards EU state aid limits *
  • This loan will not count towards De minimis aid limit **

Visit the government webpage on the Bounce Back Loan Scheme for more information.

 

Coronavirus Business Interruption Loan Scheme (CBILS)

Helps small and medium sized businesses to access loans and finance up to £5 million.

  • The deadline for the scheme: open until 30 September 2020
  • 80% government guarantee to finance the lender
  • Government pays interest and any fees for up to 12 months
  • Businesses must have an annual turnover of up to £45 million to qualify;
  • and have been adversely affected by COVID-19
  • Confirmed not classified as a business in difficulty on 31 December 2019
  • Loan is for up to three years for overdrafts and invoice finance facilities
  • Loan is for up to six years for loans and asset finance facilities
  • Loan not applicable for banks, insurers, reinsurers, public-sector bodies, state-funded primary and secondary schools
  • This loan will count towards EU state aid limits *
  • This loan will not count towards De minimis aid limit **

Visit the government webpage on the Coronavirus Business Interruption Loan Scheme for more information.

 

Coronavirus Large Business Interruption Loan Scheme (CLBILS)

Helps medium and large sized businesses to access loans and finance up to £200 million.

  • The scheme is open for facilities to be taken out until 20 October 2020
  • 80% government guarantee to finance the lender
  • Business must have been adversely affected by COVID-19
  • Business must have an annual turnover of over £45 million to qualify
  • If businesses borrow over £50 million there must be restrictions on dividend payments, senior pay and share buy-backs during the period of the loan
  • The loan is available from three months to three years.
  • This loan will count towards EU state aid limits *
  • This loan will not count towards De minimis aid limit. **

Visit the government webpage on the Coronavirus Large Business Interruption Loan Scheme for more information.

 

*EU state aid limits – €100,000 cap for funding for agricultural/horticultural businesses (or €800,000 for other businesses such as separate diversification businesses).

**De minimis (existing state aid rules) limits – Aid granted must remain under €20,000 over a three fiscal year period for agricultural businesses (€200,000 over a three year fiscal period for most other sectors).


Five key dates for farmers’ cash flow over the next 12 months

Here we explain the key dates that farms and other rural businesses need to bear in mind and why you should be aware of them for your own business.

 



Government announce Capital Gains Tax review

The government have announced a review of Capital Gains Tax (CGT). Whilst these reviews are supposedly carried out regularly the timing is arguably curious and the sceptical among us may see this as a first step towards a ‘tax grab’ to pay for the support rightly given out to individuals and businesses during the pandemic. The Chancellor’s request followed a report by the Office for Budget Responsibility that highlighted how the growing deficit in government spending was likely to exceed £350 billion this year as the costs of protecting businesses and households during the pandemic continue to mount.

So, are there reasons to be fearful?

Click below to read more…



For more information, or if you have any questions about any of the above, please contact your Old Mill adviser or click here…