Share this content

5th Grant Conundrum

SEISS 5th Grant Conundrum

Didn't find your answer?

Guest House & Cafe 5th Grant Conundrum

Net profitability confirmed as down for May-Sep qualifying period leading to reduction of 19.5% profits over basis period

Turnover 17/18 £63K 18/19 £55k 19/20 £44K ( + £7K cafe rental /property income, hence not normal year ) 20/21 £31K from draft accounts

Q.1 Re FID test , should the turnover include the non trading cafe rental income (£44 + £7K) or would 18/19 be a more relevant reference period, couple were fatigued and decided to rent for six months.

Possibly compounded by £12.5K business interruption payment this week, however this is only finalised at the end of the indemnity period March 22 and a proportion of the settlement may have to be repaid to reflect any increase in income that would offset losses.

Q.2 Should the business interruption payment be added or excluded from the qualifying period figures as it covers the total loss to the business over the 24 month indeminty period and is ongoing and may not necessarily be considered a " coronavirus support payment "

Any thoughts much appreciated

Thanks

Gandonas

Replies (2)

Please login or register to join the discussion.

By Duggimon
28th Sep 2021 11:03

I would treat the business interruption payment as being split across the period to which it relates (which is presumably the length of the pandemic rather than a full 24 months), split evenly unless more detailed analysis of the calculation of the amount due is available from the insurer.

If there's a reasonable and quantifiable expectation part of this will be repaid to the insurer, I would deduct that now. What's left I would use to amend my assessments of turnover and profit for the relevant periods.

I agree it is not a coronavirus support payment.

Assuming the rental income arising in 2019/20 did not carry on through 2020/21, I would not use 2019/20 as a comparison period and would go with 2018/19.

All the above based only on your post, were it a client of mine there might be other information that would result in a different answer.

Thanks (0)
Replying to Duggimon:
avatar
By GANDONAS
28th Sep 2021 12:00

Hello @Duggimon
Thank you for this detailed response, I will look into the claim period details and year end forecast which could reveal possible pay back amounts.
Gandonas

Thanks (0)
Share this content