COVID-19: Practical guidance for our rural and farming clients #28
In this week’s rural update:
- Government Spending Review
- Government unveils path to sustainable farming from 2021
- Eligibility for third Self Employment Income Support Scheme (SEISS)
- Update on Local Restriction Support Grants (LRSG) & Additional Restrictions Grant (ARG)
- When to pay VAT deferred due to coronavirus
- Rural ‘Virtual’ Breakfast: How can Xero help my farm?
- Brexit – diagnostics consultation for your business
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…
2nd December 2020
Andrew Vickery See profile
Rishi Sunak presented his spending review on 25 November which covers the Government spending objectives for 2021. Very little was mentioned regarding farming or the environment except that the UK government ‘commits to maintain funding to farmers for the duration of this parliament, supplementing the remaining EU funding that farmers and land managers across the UK will receive for Agri-environment and rural development projects’.
More relevant announcements are expected in the Budget due to be announced early next year, please speak to your Old Mill adviser if you would like to start preparing your business for this.
Government unveils path to sustainable farming from 2021
Defra has published their Path to Sustainable Farming: An Agricultural Transition Plan 2021 to 2024 along with a shorter summary ‘Farming is Changing’ booklet.
Without doubt, losing Basic Payment income will affect profitability for farming businesses. Farmers will need to review aspects of their business in preparation for this, including their cost of production and efficiency, and consider entering new markets to continue to be profitable. It’s expected that investment, utilisation of the Farming Investment Fund and options to collaborate with other farmers may be beneficial in order to successfully navigate the upcoming changes.
Old Mill will work with farmers and rural businesses to prepare them for this, speak to your Old Mill adviser if you want to start the conversation now.
Click below to see a full summary of the transition and a timeline of what farmers can expect.
The guidance for the third self-employment grant which can be claimed from Monday 30 November has been published and it’s important for business owners to understand that the eligibility criteria has been further tightened. This means claimants need to consider the new rules carefully before claiming.
Previous policy announcements indicated that to qualify for the third grant, a business needs to not only be adversely affected due to COVID-19 but also to:
- be currently trading but be impacted by reduced demand due to coronavirus; or
- have been trading but be temporarily unable to do so due to coronavirus.
The latest guidance includes an additional test which is that the taxpayer must:
- intend to continue to trade; and
- reasonably believe there will be a significant reduction in their trading profits due to reduced activity, capacity or demand or inability to trade due to coronavirus.
We understand that the significant reduction in trading profits test is to be applied to the accounting period as a whole which means that claimants will potentially need to forecast their financial results in order to establish their eligibility for this third grant.
HMRC’s guidance also indicates that it expects claimants to make ‘an honest assessment’ about whether they reasonably believe that their business will have a significant reduction in profits.
How to make a claim
As with previous SEISS grants, HMRC will start to contact people who they feel are eligible from 30 November 2020, however, you must make the claim yourself.
If you are unsure of whether you are eligible or want to run through the claim before submission then your Old Mill adviser is available to help.
The councils in the South West are now starting to release their application forms for businesses who qualify for LRSG and ARG grant funding. It’s important to keep an eye on closing dates as many local authorities will have a limited amount of grant funding giving less time to claim.
|Somerset West and Taunton||Open for applications||No details provided yet|
|Mendip||Open for applications||Open, closing date Monday 14 December.|
|South Somerset||Open for applications||Open for applications|
|Sedgemoor||Open for applications||Open, closing date Monday 7 December.|
|Devon County Council||Business should see the coronavirus business support pages for their local authority||Business should see the coronavirus business support pages for their local authority|
|Exeter City Council||Open for applications||No details provided yet|
|Cornwall Council||Open for applications||Closed, applications made by Monday 30 November.|
|Dorset Council||Open for applications||Open for applications|
|Wiltshire Council||Open for applications||Open, deadline for applications Friday 18 December.|
If your local authority is not mentioned above you can find details here.
The government has updated their guidance on how to pay VAT payments deferred between 20 March and 30 June 2020 with the options to pay now or get ready to opt into the VAT deferral new payment scheme.
If you deferred VAT between the dates mentioned above, and still have payments to make, you can:
- pay the deferred VAT in full on or before 31 March 2021, you don’t need to contact HMRC to inform them of payment
- opt into the new VAT deferral new payment scheme when it launches in 2021. The online opt in process will be available in early 2021. You must opt in yourself as we’re not permitted to do this for you. Before opting in you need to: have a Government Gateway account | submit any outstanding VAT returns from the last four years | correct errors on your VAT returns before 31 December 2020 | make sure you know how much you owe
- contact HMRC if you need more help to pay
Full HMRC guidance can be found here
Old Mill is here to help you through this process so please contact your adviser with any questions or queries.
Invitation to our Rural 'Virtual' Breakfast: How can Xero help my farm? - Friday 4 December - 9am
You are invited to join us over breakfast for a live session focusing on how Xero can help your farm.
This session is aimed at the farm decision maker who wants to explore and enhance their use of Xero to help benefit their farm business.
You are welcome to submit questions before the event to firstname.lastname@example.org and we will be happy to cover these during the session.
To register your place, click here.
2021 and Brexit is almost upon us. COVID-19 seems to have overshadowed matters somewhat. What do you need to know? VAT and customs procedures for the supplies of goods will be changing as from 1 January 2021. There is a vast swathe of information around, and what is clear already is that many people don’t understand what is applicable to their own trading situation.
Therefore, those with businesses who import or export – including transactions with EU based businesses – are starting to ask Old Mill for practical guidance and help in implementing specific changes and actions bespoke to their own business.
It’s very important to flag that Northern Ireland, although part of the UK, will be treated as if it is still in the EU for VAT and customs purposes. This means changes in procedures for VAT accounting, as well as additional actions and costs around customs duty, and associated cash flow implications.
Old Mill can provide BREXIT diagnostics for your business and are offering online consultation slots with our BREXIT advisers. If you’re interested, please speak to your Old Mill contact who can arrange a appointment for you.