On the same day that Mr Sunak announced the wholesale revisions to the Coronavirus Job Retention Scheme (CJRS), he also revealed an extension to the Self Employed Income Support Scheme (SEISS), and I have described the details in this latest update, together with some information on the Local Authorities’ Discretionary Grants and on the way in which errors in CJRS grant claims should be corrected.

Self-employed Income Support Scheme

This scheme which paid out 80% of the average profits of self-employed individuals and partners (up to a maximum amount of £7,500) at the end of May, as long as they met the qualifications on profitability and loss of business, has been brought back for a second stint for the three months ending 31 August. The rules for qualification for the scheme are unchanged from those used for the original scheme and which were described in detail in our Update 6 which you can find here. Like the new CJRS scheme the grant is slightly less generous than its predecessor as it pays out only 70% of average profits, up to a maximum for the whole three months of £6,570. The figures are worked out in exactly the same way as for the first grant apart from the reductions mentioned above, so the new claim will be for 7/8ths of the first claim (e.g. if you received £4,000, you will get £3,500 this time).

Generally anyone who qualified under the first scheme will also qualify under the new one, so if you have made a successful claim under the original scheme, you will be eligible for the second. Even if you didn’t apply for the first grant, you can still apply for the second, although there is no reason why anyone should be eligible for the second but not the first, other than because the business was not affected by the pandemic at the time when the original claims were made, but is now (which would appear to be quite an unusual scenario). HMRC have reminded us that claims for the first grant can be made at any time on or before 13 July, so if you want to apply and have not already done so, you should follow HMRC’s instructions to do this. The second grant will be available sometime in August, and HMRC will be announcing the dates when it will be possible to enter your Government Gateway and register your claim, with payment to be made by the end of August.

Discretionary Fund for Small Business

Local authorities have been working on their plans for distribution of these grants which we described in full in our update on May 22nd, which you can find here. In brief, local authorities have been given a “top up” fund to pay out to small businesses which have been unable to benefit from the other grants ranging from £10,000 to £25,000 which were originally made available back in April, mainly to business rates payers and businesses in the retail, leisure and hospitality sectors. As previously explained, the Government indicated that the new grants should be made to businesses in some quite specific sectors, but that the local authorities would have discretion to use part of the fund to make grants to business in sectors that they considered to make an important contribution to the local economy.

Last week Brighton and Hove City Council published the rules for their scheme which disclosed that there will be three levels of grant – £2,500, £10,000 and £25,000 – which will be available to businesses which have not already received one of the Covid-19 grants, as long as they qualify under the guidelines which they have laid down. Full details of which businesses are eligible to claim which level of grant, those which are not and the information that is required to be provided by claimants is set out in the Council’s guidance note at the top of their web page here. If you think that you may be eligible for one of the grants, you will need to complete an online application and fill in a 12 month cash flow forecast – full details of what they need are available from the guidance and you should get all of the information together before starting as it is one of those which cannot be saved and revisited, but must be completed in one session.

The Council requires all claims to be made on or before this Friday 12 June, so you need to give it priority if you want to apply. Once that date is passed, the Council will start to review the applications and will decide which qualify under prescribed rules and then exercise discretion as to which of the claims is most deserving, bearing in mind firstly the Government’s requirements, and then the importance and relevance of the businesses to the City’s economy, including investment plans and commitment to carbon-neutrality. As mentioned above, full details of the criteria against which the applications will be assessed is included in the Council’s guidance, and they have said that the sectors which they will be looking to support will be those in the events, retail, arts, culture and creative industries.

Coronavirus Job Retention Scheme

You may recall that HMRC asked grant claimants not to adjust their claims for errors that they may have found in previous claims as they were in the process of developing a system which could be used to make these adjustments without potentially distorting the figures in the current claim resulting in possible delays in making the payments due to HMRC scrutiny.

They have now issued guidance to say that the claim process will now include a new section for making disclosures of such errors, which will then be deducted from the claim that you are making. If there is no current claim to make this adjustment against, or it is not large enough to cover the over-claimed amount, this system cannot be used, and HMRC are working on a further system which will enable such amounts to be declared and paid back to HMRC.

Author: Peter Hedgethorne, Director, Plus Accounting

Any views or opinions represented in this blog are personal, belong solely to the blog owner and do not represent those of Plus Accounting. All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.

Date Published: 9 June 2020