Top-up to local business grant funds scheme

A discretionary fund has been set up to accommodate certain small businesses previously outside the scope of the business grant funds scheme. This is an addition to the premises based grants previously announced of £10,000 where full business rates relief applied or £25,000 for specific industries in retail, hospitality and leisure. It has been put in place to provide a grant for those businesses who fell outside the original criteria.

This additional fund is aimed at small businesses with ongoing fixed property-related costs. The government is asking local authorities to prioritise businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for Small Business Rates Relief, and bed and breakfasts that pay council tax rather than business rates.

BUT local authorities may choose to make payments to other businesses based on local economic need. The allocation of funding will be at the discretion of local authorities.

Businesses must be small, under 50 employees, and they must also be able to demonstrate that they have seen a significant drop of income due to Coronavirus restriction measures.

There will be three levels of grant payments. The maximum will be £25,000. There will also be grants of £10,000. Local authorities will have discretion to make payments of any amount under £10,000. It will be for councils to adapt this approach to local circumstances.

Useful government tool to check what support your business can ask for

Go to the following link, answer the questions and it will provide a summary of what may apply to you.
https://www.gov.uk/business-coronavirus-support-finder

Update on the Self-employment income support scheme

Basic rules

The scheme will allow the self-employed and partners to claim a taxable grant of 80% of your average monthly trading profits, paid out in a single instalment covering 3 months, and capped at £7,500 altogether. This is a temporary scheme, but it may be extended.

They will first check your eligibility in terms of not having more than £50,000 in profits and less than half your income coming from self employment in the 2018/19 year, based on the tax return submitted. You also needed to have traded in 2019/20, but they will not take that year into account for average profit purposes.

Then they will give you a one-off grant of 80% of 3 months average profits from continuing self employment as an average over the tax years 2016/17 to 2018/19 or lesser period if you did not trade over the full 3 years.
If you receive the grant you can continue to work, start a new trade or take on other employment including voluntary work, or duties as an armed forces reservist.

The grant will be subject to Income Tax and National Insurance.

How do I claim?

HMRC will work out if you’re eligible and how much grant you may get. They will contact you to make a claim. We can of course check it for you.

To work out your eligibility HMRC will first look at your 2018 to 2019 Self Assessment tax return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income.

They will take into account losses in any year in working out your average profits, but they will ignore brought forward losses.

If you’re not eligible based on the 2018 to 2019 Self Assessment tax return, HMRC will then look at the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019.

HMRC have said we cannot make the claim for you. However, we are here to assist if you need any help or support.

BAYLISS WARE
CHARTERED ACCOUNTANTS
4 MAY 2020