COVID-19 Support for Dairy Farmers

Published on 17th June 2020

Dairy Response Fund

Around a month on from the Environment Secretary’s widely publicised proposal on 6 May to create a new fund to help dairy farmers affected by Coronavirus, some further details have finally been released.

Current indications remain that only a small minority of dairy farmers will be able to secure a grant under the scheme, but it is important that claims are made by those who are eligible.

The current proposal is:

• The Rural Payments Agency (RPA) are to accept claims from 18 June. Grant payments are due to start on 6 July

• Claimants will be required to demonstrate that their average milk price for April 2020 was down by at least 25% from February 2020

• The grant will be calculated at 70% of the price reduction, applied across the April and May 2020 production levels

• There will be a single grant and it will be capped at £10,000 per farm business

The finer details and the application process have still to be announced but, given the target opening date of 18 June, we recommend that those dairy farmers who have been hit hard by price cuts should monitor the RPA’s news page over the coming days.

In advance of the scheme opening, the Farming Minister has recommended that dairy farmers should collate details of milk production and prices for February, April and May 2020.

Self-Employment Income Support Scheme (SEISS)

The scheme has recently been extended for a further 3 months. Applications are expected to open in August 2020, and will cover the period of June – August 2020. The amount of the grant will be reduced from 80% to 70% of average employed earnings, with the maximum grant awarded being reduced to £6,570 (previously £7,500).

A key date for the first round of grants under the SEISS that opened 18 May 2020, is that the portal for applications will close on 13 July 2020. If you are yet to claim and believe that you are eligible, it is essential that you apply by this date. Please note that you do not need to have claimed under the first grant to be eligible for the second.

Eligibility criteria

Claims can be made by self-employed individuals or members of a partnership where the taxpayer:

• Has submitted their self assessment tax return for the tax year 2018 to 2019

• Traded in the tax year 2019 to 2020

• Is trading when they apply, or would be except for Coronavirus

• Intends to continue to trade in the tax year 2020 to 2021

• Has lost trading profits due to Coronavirus

The taxpayer will need to confirm to HMRC that their business has been adversely affected by Coronavirus. HMRC will as usual use a risk-based approach to compliance have power to recoup grants claimed wrongfully.

The taxpayer’s trading profits must also be no more than £50,000 and more than half of their total income for either:

• The tax year 2018 to 2019; or

• The average of the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019.

Eligible self-employed individuals should have received a letter from HMRC outlining the scheme and how to apply. If you have not yet received this, you can check your eligibility via the HMRC checker.

Bounce Back Loan Scheme

The Micro Loan Scheme (AKA ‘Bounce-Back’ Loan) should provide instant rapid cashflow relief to many small businesses.

The main features of the loan scheme are:

• Loans from £2,000, up to a maximum of £50,000 or 25% of turnover

• Loan terms up to 6 years

• Interest free and no fees for 12 months

• No repayments due during the first 12 months

• 100% Government backed (rather than 80% under CBILS but the borrower remains liable for repaying the loan)

• Simple 2-page online application form

• No financial forecasts required

• Access through accredited lenders

• Cash should be paid within 24 hours of approval

• Government working with lenders to agree a low standardised level of interest for the remaining period of the loan

Small Business Grant Fund (SBGF) and Retail, Hospitality and Leisure Grant (RGLG)

If you have got a furnished holiday let but have not been contacted about receiving the above grants, please get in touch with your local Council to confirm if you qualify as soon as possible.

To recap:

• All eligible businesses in England in receipt of Small Business Rates Relief or Rural Rates Relief will be eligible for a payment of £10,000 via the SBGF

• Business listed as eligible by Government for the RHLG will receive a grant of £10,000 for a rateable value up to £15,000 or a grant of £25,000 if your rateable value is between £15,001 and £51,000

The grant applications are made online via the relevant Council website. Details of the website together with a unique identifying pin number are provided in the letter.

Local Authority Discretionary Fund Grant

An additional grant fund aimed at small and micro businesses who were not eligible for the Small Business Grant Fund or the Retail, Leisure and Hospitality Fund. This may apply to a farm B&B.

There are grants available for £1 – £25,000.

In particular, the grant is aimed at:

• Market traders

• Businesses in shared offices

• B&B’s who pay council tax instead of business rates

• Charity properties in receipt of charitable business rates relief

The grant applications are made online via the relevant Council website.

If you require further assistance, please do not hesitate to get in touch.