July 2021-Changes to Government COVID19 Support Grants To Businesses

We are here, giving you an update on two of the various grants made available to support businesses and charities in the wake of COVID19.

Contents:

Furlough Grant

Fifth SEISS (Self Employed Income Support Scheme Grant)

FURLOUGH GRANT REDUCES TO 70% FOR JULY

For the month of‌‌ July, the CJRS Furlough grant support from the government via HMRC reduces to 70% of the employee’s usual pay for hours not worked. The government support to employers will then reduce to 60% in August and September.

Correcting Errors In Earlier Furlough Claims

The numerous changes in the method of calculating CJRS furlough grants may have resulted in errors by some employers.

Remember that you are required to tell HMRC about overclaimed CJRS grants as part of your next claim. You will be asked when making your claim whether you need to adjust the amount down to take account of a previous overclaim. Your new claim amount will be reduced to reflect this. You need to keep a record of this adjustment for 6 years.

Be aware that HMRC may levy a penalty even if the error is careless or due to a misinterpretation of the rules.

Let’s know if you would like us to check any previous claims that you have made.

If you have made an error that has resulted in an underclaimed amount, you should contact HMRC to amend your claim. As you are increasing the amount of your claim HMRC will need to conduct additional checks.

FIFTH SELF-EMPLOYED INCOME SUPPORT GRANT TO BE PAID IN JULY

The fifth (and final) SEISS grant will be available for the self-employed to claim towards the end of July.

The eligibility criteria remain broadly the same as the fourth grant. Self-employed profits in 2019/20 must not exceed £50,000 and must be more than 50% of your total income. If that test is not met, then the same £50,000 and 50% tests are applied to average profits and total income over the four fiscal years to 2019/20.

Self-employed traders need not have claimed grants under the previous scheme to qualify for the July payment and will be required to confirm that their business continues to be adversely affected by Covid-19. The amount that traders will be able to claim will depend on how much their turnover has reduced. If the reduction is more than 30% the grant will be 80% of average profits capped at £7,500 but if less than 30% only 30% of average profits, capped at £2,850.

We are still waiting for more details from HMRC on the basis of the turnover comparison.

Please note that If you are self-employed and have received any SEISS grants in 2020/21 the amounts received are taxable but should not be included in your turnover.

PS | We specialise in helping charities, and businesses in the health sector (optician, optometrist & pharmacist businesses) optimise their resources, thereby, adapting, growing, and thriving. If you want to know how we can help your business or charity, please connect with Bim on LinkedIn or send an email to info@aeaccountax.co.uk

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