The latest guidance includes an additional test which is that the taxpayer must:
- Intend to continue to trade; and
- Reasonably believe there will be a significant reduction in their trading profits due to reduced activity, capacity or demand or inability to trade due to coronavirus.
Chris Bowles, a director at Old Mill’s Wells office, says the new rules are significantly different, and it is important to understand them fully before claiming.
He said: “We understand that the significant reduction in trading profits test is to be applied to the accounting period as a whole, which means that claimants will potentially need to forecast their financial results in order to establish their eligibility for this third grant.”
HMRC’s guidance also indicates that it expects claimants to make “an honest assessment” about whether they reasonably believe that their business will have a significant reduction in profits.