Updated guidance on grants available to small businesses

Applications for the second small business grant for the self-employed (and for members of a partnership) will open from 17 August but it’s vitally important to understand the eligibility criteria.

Chris Bowles, a director at Old Mill’s Wells office comments: ‘It’s important that business owners recognise that they aren’t automatically entitled to this grant. There are specific details that need to be met in order to qualify but one thing to think about is the business will need to be comfortable that it carries on a trade which has been adversely affected by coronavirus since the 14 July.

‘Taxpayers need to submit their claim for this second grant directly to HMRC by 19 October and HMRC has said the meaning of ‘adversely affected’ includes being unable to work because they’re shielding, self-isolating, on sick leave or have care responsibilities because of coronavirus.

‘It also includes scaling down, temporarily stopping trading or incurring additional costs because:

• the supply chain has been interrupted;
• the business has fewer or no customers;
• staff are unable to work
• one or more of contracts have been cancelled; or
• protective equipment was purchased to comply with social distancing rules.

‘I would also say that it’s advisable to maintain evidence to support this just in case the claim is queried by HMRC a bit further down the line.’

This second grant will be calculated as 70% of three months of trading profits, up to a maximum of £6,570.

Click here to access HMRC guidance around the specific eligibility criteria.

Applications for the grant will be made in the same way as the first SEISS grant 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.

The government has also announced £20 million of new funding to help smaller businesses recover from the effects of the coronavirus pandemic.

The Minister for Regional Growth and Local Government confirmed that small and medium sized businesses in England can access grants between £1,000 – £5,000 for new equipment and technology and specialist advice.

This additional funding has been allocated to Growth Hubs within each LEP area in line with the current European Regional Development Fund Programme.

Click here for further details.

To apply for these grants you will need to locate the Growth Hub nearest to you or call the Business Support Helpline on 0800 998 1098 to speak to a business support adviser.

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

Chris Bowles says ‘The onus is on the taxpayer to notify HMRC if they have overclaimed a SEISS grant and this must be done within 90 days of Royal Assent (so by 20 October) or 90 days of receipt of the grant, whichever is the later.’

Finance Act 2020 provides HMRC with powers to recover grant payments to which the recipient is not entitled, as well as to charge penalties so we would recommend that self-employed business owners who have claimed grants check that they were entitled to the amount they received.

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