Weekly round-up: Covid-19 Financial Support in week 7

By James Geary

James Geary

 

There is clearly no such thing as a “quiet week” for the various Covid-19 support mechanisms – despite most of us being confined to home there is a lot happening again this week as we head into the Bank Holiday weekend.

The Self-Employment Income Support Scheme (SEISS) is expected to launch next week, with first payments from HMRC expected by 25 May.  We are one of a limited number of agents who have had the opportunity to put forward a handful of our clients for a pilot of the scheme this week, so by early next week we should have a good idea as to how the system is going to work. Emma Robinson’s article explains more about this.

A key message in relation to the SEISS, which cannot be stressed enough, is that to claim the support the business must have experienced a downturn because of Coronavirus.  When applying, applicants will have to effectively certify this.  HMRC will be looking closely at next year’s tax returns and are sure to raise enquiries into returns for people who have had the support, where the numbers suggest that their profitability would have been much the same without it.  It will therefore be crucial to keep evidence of that downturn in business if claiming.

The Bounce Back Loan (BBL) scheme launched this week and we have heard reports that it is very easy to apply, so it appears to be meeting its aims so far.  As a reminder, this scheme allows small and medium sized businesses to access loans of up to £50,000 (or 25% of turnover if lower) which are 100% government guaranteed and have the interest (2.5%) covered for the first 12 months.

Further Small Business Grants have also been announced this week, details of this are a little sparse at the moment but effectively these will be administered by local authorities and are designed to support those businesses who have not been eligible for the other local authority grants to date, whilst still having generally fixed property costs to run their business.

A few other highlights this week:

  • We understand a number of Coronavirus Job Retention Scheme applications were rejected by HMRC because of the business having other tax debts.  HMRC have confirmed that these applications should not have been rejected and have urged affected businesses to reapply.
  • A rule relaxation for Lifetime ISAs has been announced, so that people who are in financial difficulty and need to withdraw funds from a LISA can now do so without the additional charge.  Only the government bonus from the time of the deposit needs to be refunded to the government, the additional charge will be waived for a limited period.
  • Up to £10,000 is available to Dairy Farmers in England to help them through the crisis.

For those keen on harnessing some strategic thinking to help their business through the Covid-19 period, Will Abbott will be delivering a free of charge one hour webinar “Survive – Pivot/Adapt – Thrive” next week.  Please click here for more information on this webinar and to sign up.

Our clients have access, through Will, to a menu of online Mindshop courses, and for a limited period our clients and their teams can access any two of these courses free of charge.  More information on this can be accessed via the webinar information link above.

Finally, with all these different kinds of support, we are getting a lot of questions from our clients and contacts about State Aid and how the various support mechanisms may affect eligibility for things like R&D Tax Credits, Enterprise Investment Scheme (EIS), Seed EIS and Employment Allowance.  I am planning to write an article on this sometime next week but do contact me sooner if this is something that is already on your mind and you need any clarification.

Stay safe, enjoy your Bank Holiday weekend, and let’s hope for some good news about some relaxations to restrictions next week!

James Geary is head of Corporate Tax and is happy to help with any questions or concerns you may have at this time – you can contact James on james.geary@randall-payne.co.uk or 01242 776000 to arrange a call back.

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