COVID-19 Business Support Update - 13th August 2021

Applying for the fifth SEISS grant – Turnover Tests and Reasonable Belief

The fifth instalment of the Self-employment Income Support Scheme (SEISS) grant opened for applications in late July. This is scheduled to be the last instalment of the SEISS grants and unlike its predecessors it introduces a turnover test, which will determine the amount of grant awarded to self-employed workers whose businesses have been hit by the coronavirus (COVID-19) pandemic.

How much is the grant?

As well as meeting the turnover test, applicants will also need to show that they have a reasonable belief that there is a significant reduction in trading. Here, we take a look at the application process for the fifth SEISS grant. Unlike SEISS grants one to four, the amount of the fifth grant available is determined by how much a self-employed individual's turnover is reduced.

The fifth grant is 80% of three months' average trading profits, capped at £7,500 for those self-employed individuals whose turnover has reduced by 30% or more. Those with a turnover reduction of less than 30% will receive a grant based on 30% of three months' average trading profits, capped at £2,850.

HMRC began contacting taxpayers in mid-July and claims opened in late July. Claims must be made by 30 September 2021. It is the taxpayer who must make the claim: an accountant or agent cannot submit the claim on their behalf.

Who is eligible?

Self-employed individuals (and members of a partnership) are potentially eligible for the fifth SEISS grant where the taxpayer:

• Submitted their 2019/20 self assessment tax return by 2 March 2021
• Traded in the tax years 2019/20 and 2020/21
• Is currently trading but is impacted by reduced demand due to COVID-19, or has been trading but is temporarily unable to do so due to coronavirus
• Intends to continue to trade; and
• Reasonably believes there will be a significant reduction in their trading profits due to the impact of COVID-19 in the period from 1 May 2021 and 30 September 2021. HMRC has not provided a definition of 'significant reduction'.

The taxpayer's trading profits must be no more than £50,000 and at least equal to their non-trading income. If there is no eligibility based on the trading profits for 2019/20, then previous years will be considered.

The Turnover Test

Before making a claim, taxpayers must:

• Work out their turnover for a 12-month period starting from 1 April 2020 to 6 April 2020
• Find their turnover from either 2019/20 or 2018/19 to use as a reference year.

HMRC advises taxpayers will need to have both figures ready when they make their claim. 

A taxpayer can calculate their turnover for 2020/21 in several ways: 

• By referring to their 2020/21 self assessment tax return if this has already been completed
• By checking the figures on their accounting software
• By reviewing their bookkeeping or spreadsheet records that detail their self-employment invoices and payments received
• By checking the bank account they use for their business to account for money coming in from customers
• By asking their accountant or tax adviser for help in calculating the figures. However, accountants and agents are unable to make the claim on the taxpayer's behalf.

HMRC has confirmed that the turnover figure should not include anything reported as any other income on the taxpayer's tax return. Also, do not include any COVID-19 support payments. For example:

• Previous SEISS grants
• Eat Out to Help Out payments
• Local authority or devolved administration grants.

HMRC's guidance is available at: https://www.gov.uk/guidance/work-out-your-turnover-so-you-can-claim-the-fifth-seiss-grant.

Turnover for the previous year

In most cases, a taxpayer must use the turnover reported in their 2019/20 self assessment tax return as a reference year. The figure needs to be based on a 12-month period and include the total turnover for the taxpayer's businesses.

In certain limited circumstances where 2019/20 was not a normal year for the taxpayer's business, they can use the turnover reported on their 2018/19 tax return. HMRC gives examples of the circumstances where this would apply. For example, if the taxpayer:

• Was on carers' leave, long term sick leave or had a new child
• Carried out reservist duties
• Lost a large contract
• Is eligible for the fifth grant but did not submit a 2019/20 return.

For further guidance on how an individual's circumstances can affect eligibility visit: https://www.gov.uk/guidance/how-different-circumstances-affect-the-self-employment-income-support-scheme.

Getting ready

Claiming the fifth SEISS grant is not straightforward. Please contact us for advice on determining your turnover figures or eligibility.

The Community Ownership Fund for Wales Closes 13th August

The Community Ownership Fund is now open and will close for applications on 13th August 2021.

The £150 million Community Ownership Fund is for communities across the United Kingdom. It has been set up to help communities take ownership of assets and amenities at risk of closure. It will run for 4 years.

Funding may support the purchase and/or renovation costs of community assets and amenities, subject to the full eligibility criteria.

The fund will support a range of community ownership proposals. For example, projects may include:

• sporting and leisure facilities
• cinemas and theatres
• music venues
• museums
• galleries
• parks
• pubs
• post office buildings
• shops

Proposals will need to prove the value of the asset to local people and that the asset can run sustainably for the long-term benefit of the community.

For full details on this fund and to view the prospectus please visit: https://www.gov.uk/government/publications/community-ownership-fund-prospectus/community-ownership-fund-prospectus

Business Rates Discount Continues in Wales 

Retail, leisure and hospitality businesses in Wales will not have to pay any rates until April 2022 thanks to continued support from the Welsh Government. Full discounts in England finished on 1 July 2021.

The full 100 per cent discount will apply to all businesses, charities in the leisure and hospitality sectors. Retailers in properties with a rateable value of up to £500,000 will also continue to receive full discounts on their rates for the remainder of the year.

For further information please visit GOV.Wales.

Kickstart Scheme

The Kickstart Scheme provides funding to create new jobs for 16 to 24 year olds on Universal Credit who are at risk of long term unemployment. Employers of all sizes can apply for funding which covers:

• 100% of the National Minimum Wage (or the National Living Wage depending on the age of the participant) for 25 hours per week for a total of 6 months
• Associated employer National Insurance contributions
• Minimum automatic enrolment pension contributions

Employers can spread the job start dates up until 31 December 2021. Businesses will get funding until 30 June 2022 if a young person starts their job on 31 December 2021.

For further information visit: https://www.gov.uk/government/collections/kickstart-scheme

Third Sector Resilience Fund for Wales

This fund is a continuation of Welsh Government’s support to the voluntary sector and will be delivered by Wales Council for Voluntary Action (WCVA) and Social Investment Cymru (SIC) Team.

The new phase of the Resilience Fund will initially offer over £2m in additional grant funding and aims to help organisations that continue to experience problems with their revenue streams or may want to invest in new or improved ways of generating income.

The new phase of the Third sector resilience fund for Wales will have two strands:

• ‘Survive’ – acknowledging that for some the impact of COVID-19 was late to take effect or become fully apparent, and 
• ‘Thrive’ – for organisations looking to develop and improve their resilience as they recover from the impact of the pandemic.

To register your interest and be notified when the fund goes live, please email sic@wcva.cymru

There are a number of funds (grants and loans) available from SIC. SIC financially supports social enterprises in Wales to generate more income or expand their range of services, and organisations that have previously struggled to attract grant funding for new projects. These funds/grants include:

• The Social Business Growth Fund is a mix of grant and repayable assistance that is designed to enable social businesses in Wales to grow and create job opportunities. SBGF is part funded by the European Regional Development Fund and Welsh Government.
• The Community Asset Development Fund supports social businesses that want to bring an asset, like a library, pub or community hall, into community ownership.
• The Communities Investment Fund is a loan fund for social businesses that want to expand, generate more income or purchase an asset. We aim to lend where traditional lenders won’t.
• The Wales Micro Loan Fund is funded through The Development Bank of Wales to support small and medium sized enterprises through small ‘micro’ loans. 
• The Walter Dickie Leadership Bursary is an annual award of £2,500 to support individuals in the voluntary sector to develop their leadership skills. 

For further information on all of the above visit https://wcva.cymru/funding/social-investment-cymru/

For help or advice on the support available for businesses please contact your usual BPU Adviser or contact:

Huw Palin, Director
Email: huwp@bpuaccountants.co.uk