FINANCIAL ASSISTANCE FROM GOVERNMENT
The Chancellor has announced a series of measures that will assist local businesses in these challenging times. Farms and farms that have diversified may also be able to avail of assistance.
The NI Business Info website will provide you with up to date information.
VAT payments have been deferred by three months. VAT registered businesses should continue to file their VAT returns by the due date. Any businesses that have a direct debit for payment of their VAT and wish to defer payment will need to cancel it before the original collection date. The deferral for VAT payments applies from 20th March 2020 until 30th June 2020. All VAT registered traders are eligible. This is an automatic offer and no application is required. Businesses will not need to make a VAT payment during this period.
Small Business Grant Scheme
The NI Economy Minister Diane Dodds announced the first set of payments for small businesses impacted by the Coronavirus crisis will be made under the Small Business Grant Scheme on 31 March, if not before then. An online portal: has gone live for businesses to register their bank and rates details to secure payment. Payments of the £10,000 grant will be available in cash to 27,000 small businesses including those in receipt of the Small Business Grants Scheme. On 10th April it was announced that this support will now be extended to 25 include small industrial businesses that qualify for industrial de-rating. This expansion will cover around 2,500 additional businesses.
Tourism, hospitality, leisure and retail sector
An additional 4,000 businesses in the tourism, hospitality, leisure and retail sectors will receive £25,000 in cash if they have a rateable value of between £15,001 and £51,000. Registration is now open for businesses to apply for this scheme. This may be relevant to farm businesses who have diversified. Further details are available click here.
Self Employed Income Support Scheme (SEISS)
Direct financial support will be provided to self-employed individuals, including farmers who have been affected financially by Covid-19 in the form of a grant. This is not a loan and is not repayable. It will however be subject to Income Tax and National Insurance contributions.
The grant is only open to those with total self-employed earnings below £50,000 and where those earnings account for more than half of their total income. The amount of the grant will be 80% of monthly self-employed profits with a cap of £2,500 per month. It will be paid initially for 3 months, backdated to March 2020, in the form of a lump sum in June. HMRC have started issuing letters to self-employed individuals who may be eligible.
If you’re eligible and want to claim the first grant you must make your claim on or before 13 July 2020.
One of the key eligibility conditions for this scheme is to have filed a 2019 Self-Assessment tax return.
This scheme is being extended. You’ll be able to make a claim for a second and final grant in August 2020. The online service for the second and final grant is not available yet.
Further details on claiming the grant and eligibility conditions can be found in revised HMRC guidance. HMRC have also now published guidance on how they will calculate trading profits and total income.
If you’re eligible the second and final grant will be a taxable grant worth 70% of your average monthly trading profits, paid out in a single instalment covering a further 3 months’ worth of profits, and capped at £6,570 in total.
The UK Farming Unions will continue to engage with HMRC on areas where further clarification is required or where members are experiencing barriers to accessing this grant – please contact us at firstname.lastname@example.org if you have any issues.
To check if you are eligible to claim:
You should use HMRC’s online tool to find out if you’re eligible to make a claim. Please click here.
You will need your:
- Self-Assessment Unique Taxpayer Reference (UTR) number. This is your unique ten digit reference number with HMRC that is used to file your tax return and make tax payments. You will find it on copies of your tax return, payment advice or correspondence from HMRC.
- National Insurance number
If you are eligible, HMRC will tell you the date you’ll be able to make a claim from and ask you to add your contact details and verify your identity online. HMRC will then use the contact details you have supplied to remind you when the online service will be available. When checking your eligibility, you will need to enter contact information and set up a Government Gateway account with HMRC for them to communicate directly with you if you do not already have an HMRC Government Gateway Account. (This may not the same as a DAERA Government Gateway).
Anyone experiencing issues verifying their identity online is asked to contact HMRC from 8am on Wednesday 13 May 2020 via telephone number 0800 024 1222. This will allow an HMRC Agent to submit a manual claim on your behalf. It is worth remembering that the system will open for the first time for claims on Wednesday 13 May at 8am and HMRC do envisage that the caller/user volume will be high. Therefore, if you are initially unsuccessful in accessing the Government Gateway system or speaking with an Agent via the helpline you should try again later. The helpline will close each afternoon at 4pm.
This link to the government website for anyone requiring help in contacting HMRC with a specific Self-Employed Income Support Scheme query:
Income Tax Deferral for the Self-Employed
Support is being provided to businesses during the coronavirus pandemic by deferring selfassessment for the self-employed for six months. This applies to the second payment on account for 2019/20 due on 31st July 2020. This is now deferred until 31 January 2021 and no interest will be charged during the deferral period. No application is required as it is mandated automatically.
HMRC have published new guidance on furloughed workers. The key point of clarification is that employees ARE permitted to work for another employer if their contract permits whilst on furlough. This scheme is now open for applications.
Coronavirus Business Interruption Loan Scheme
This is UK-wide Loans up to £5m guaranteed by government. Businesses can access the first 12 months of that finance interest-free and fee-free, as the government will cover the first 12 months of interest payments and any lender-levied charges. You must apply for this scheme through the main banks in NI and some other lenders.
A farmer can borrow up to £500k for max of six years (can be cleared at anytime). In year one of borrowing, the interest and loan fee is covered by Government (this is why it is classed as a grant and where some confusion was caused).
Typical loan interest would be above £100k - 3% and below is 4%. Three stages to getting the loans:
- Stage one - would move all existing bank borrowings onto interest only.
- Stage two - would move all asset finance onto interest only (the HP companies are now offering this when previous downturns weren’t willing to do so).
- Stage three - a cash flow must be prepared (by farmer or accountant) highlighting a short fall over the next 12 months. I.e if originally looking £100k and by moving to interest only on current loans and asset finance saved the farmer 40k then the true shortfall would be £60k - the application would then be for £60k.
The thing to remember, this is only an avenue for those who are impacted by COVID-19 and not a way for people to switch existing debt, so if a sector is not impacted, they are unlikely to be offered the government backed scheme. Also if the farmer had anticipated paying the debt back over the 12 months but hasn’t been able to and is then faced with interest and loan fee and restricted to paying back in the five remaining years, the farmer could look at rolling all borrowings into traditional bank borrowing and taking over a longer period say 10-15 years.
There would also be a discussion between stages two and three to see if a more short-term option was available i.e extension to overdraft.
Bounce Back Loan Scheme
What is the Bounce Back Loan Scheme?
The Bounce Back Loan Scheme is a government initiative to support small and medium-sized businesses. The government provides lenders like Ulster Bank with a guarantee for 100% of the loan.
Note, the borrower remains liable for all of the debt.
- Borrow from £2,000 up to £50,000
- (up to a maximum of 25% of your turnover)
- Fixed 6 year loan term, with no early repayment fees if you wish to repay the loan early
- Interest rate 2.5% fixed
- 12 month capital repayment holiday is automatically applied at the start of the loan (this may mean you pay more interest over the term). However, you can choose to make repayments at any time
- Interest for the first 12 months is paid by the government, and then by you for the remainder of the loan term
- Personal guarantee is not required
The Bounce Back Loan Scheme is provided through a government scheme and does not benefit from the same level of consumer protection as other bank loans. If you are in any doubt about whether this loan is right for you, you should take legal advice.
How do I get the Bounce Back Loan?
(i) Apply online - Check your eligibility below and submit an enquiry online. The lender will email you a digital application form to fill in.
(ii) Sign and submit - Review, sign and submit your loan documents online, which is quick and easy. The lender will then do their checks
(iii) Receive funds - If your application is successful, the lender will aim to have funds in your account within 48 hours.
What about rates payments?
The issuing of domestic rates bills will be delayed for 3 months to June 2020 and those farms with facilities that pay business rates will pay zero rates for the next three months (this will be shown as a 25% reduction on rates bills). This rates holiday will save businesses £100m. More information here.
I am facing ongoing financial problems on my farm who can help?
Rural Support can provide assistance to help in these situations, information on their website or phone their helpline: 0800 138 1678 (operates 9am – 9pm).