Farming: Is the Coronavirus Income Support Scheme available for your business?
Mike Bracegirdle, Head of Agriculture at Butcher & Barlow, considers if farmers and contractors may be able to benefit from the Government’s coronavirus Self Employed Income Support Scheme (SEISS) if their business has been affected by the pandemic.
The package applies to the self-employed which includes sole traders and partners, the most common business structures for farmers and contactors. The Scheme opens in May.
- The farmer or contractor must have been trading in the 2019/2020 tax year.
- They must be trading when they apply for SEISS, or would have been had it not been for the pandemic, and they must intend to continue trading.
- Their 2018/2019 return must have been filed by 23rd April 2020.
- They must be able to prove that the business has been detrimentally affected by the pandemic i.e., they have lost or will lose trading profits due to coronavirus. They can still be bringing in money.
- However, trading profits must be less than £50,000 (either in 2018/2019 or on average from 2016/2017 – 2018/2019) and comprise more than half of their total taxable income.
If you are eligible, HMRC will contact you to invite you to claim. You cannot apply unless invited to. If accepted, payment will be made direct to the sole trader or partnership trading accounts.
If you pay yourself a salary and a dividend through your company, you will not be eligible for SEISS but may be eligible for the Coronavirus Job Retention Scheme (See our article on this by Employment Law specialist Justin Kelly: Coronavirus Job Retention Scheme)
It may be assumed that farming is not affected by the outbreak. However, farmers have seen increased costs and reduced market prices, fruit and vegetable growers have seen higher overheads, dairy farmers have seen the price of milk per litre fall and beef and livestock farmers a fall in auction prices.
Many farmers have diversified in to businesses which rely on human contact such as B & B’s or sporting activities. These have too have been affected.
What is available?
- SEISS will pay a grant of up to 80% of the average of the historic trading profits over the last three years subject to a maximum of £2,500 per month.
- The grant will be initially paid for 3 months but it is possible that this will be extended.
- For farm partnerships the grant is available per individual, rather than for the business. It is believed that the rules will apply to the partners share in profits.
- If a Self Assessment tax return has not been submitted for all the past three years, HMRC will calculate your average trading profit based on continuous period of self-employment.
How can Butcher & Barlow Assist?
Our Agriculture Team is able to liaise with your accountant or financial adviser to confirm your trading structure.
In the event of a disputed claim, our Dispute Resolution Team can review your claim and assess the likelihood of a successful appeal (if allowed).
Going forward, Butcher & Barlow can consider your specific requirements for the business and personally and advise on the appropriate business structure for your farming or farming related enterprise.
Although is accordance with Government guidelines, our offices remain closed, Agriculture Team remain available for advice and guidance on any existing or new matter and please do not hesitate to get in touch via firstname.lastname@example.org or email your legal adviser directly. Mike can be can be contacted at email@example.com or on 07768 512997.
To view Butcher & Barlow’s own working practices, please visit www.butcher-barlow.co.uk/news.