Bounce back loans

farmerm

Member
Location
Shropshire
Had an interesting chat yesterday with the accountant, and touched on the self employed support payment at the height of covid last year... I think there were 5 in total...?

Apparently, there are a few less than aware types, not declaring the payment in their tax returns.... HMRC have their computers flagging up any inconsistencies in returns and are looking hard at questionable activities.

We took one payment, and it went straight into the business a/c and was shown as income.
Then you have accounted for it wrong I think? As I understand it self employed support payments where made to the individual not their self employed business... as such if the money was either paid directly or transferred into your business it should be treated as owner introduced capital not income. These payments are to be reported separately on self assessment so when you report it separately and it also sits inside your profit figure you could be getting taxed on it twice I think? Like you we met the criteria to claim the first payment but awkwardly, and partly because of the death of a family member and business partner, we didn't make some planned spending and investments in the back end of the 2020-21 tax year. Having accounts showing a higher profit in the year when the grant was claimed may be problematic :banghead: fortunately neither the first or second round grants specified you had to be adversely affected financially, "shielding" and "caring responsibilities" certainly had an very noticeable adverse affect on our operations.

edit sorry I think you are actually correct. You can either declare the grant outside of the partnership or as income inside it, just take care to avoid doing both!
 

beardface

Member
Location
East Yorkshire
I think they will flip the script and all blame the banks when the economies tank in 10-12 months - because none of this new money is tied to anything like gold or toenail clippings even

it's a nice way of keeping things looking good as the ship goes down

devils advocate - if you were about to nationalise/confiscate the land in a country,, would it be a cheap investment to get every Tom, Dick and Huw to get soil tests done in practically every field in said country, and have it all on a big database somewhere central?

Hence why we aren't in a rush to submit to it.
 

Werzle

Member
Location
Midlands
I think that in my situation the idea of borrowing a bit to buy some fertiliser for the 400 or so acres that will need some is as good a pay back as I can think of.

Just because the pigs haven't been doing so well doesn't mean that I should deny the rest of the farm (arable, beef cattle, sheep and so on) some fertiliser. I would be fine if the fertiliser hadn't got so stupidly expensive and I didn't buy any earlier on because I didn't have the cash flow at the time
You know your business better than me so crack on. I just read your post about having a dreadfull year and thought borrowing money wouldnt be wise. With all the different income streams you have i am suprised a few of them havent evened out those that havent done so well especially in a year when corn, beef and sheep have returned fantastic sums. The sub on 400 acres would be a tidy sum.
 

TheTallGuy

Member
Location
Cambridgeshire
I think that some of the banks could well be in for a shock when defaults start building up, according to a friend at the treasury they're likely to fall foul of not having done their part on "due diligence" before releasing funds - particularly on loans after the initial rush. Apparently if the treasury decide that insufficient checks were done then the government guarantees don't stand & the banks have to pick up the tab...
 

Pan mixer

Member
Mixed Farmer
Location
Near Colchester
You know your business better than me so crack on. I just read your post about having a dreadfull year and thought borrowing money wouldnt be wise. With all the different income streams you have i am suprised a few of them havent evened out those that havent done so well especially in a year when corn, beef and sheep have returned fantastic sums. The sub on 400 acres would be a tidy sum.
I had the theory that multiple things might help, however the arable had poor yields and the pigs will eat it all, there is little hay to sell as it was rubbish. The subsidy is very handy but contract charges and chemical bills are taking most of that. Cattle sales were good and so were sheep but they are small in comparison to the costs of raising pigs.

I have had a similar sized herd of pigs for almost 40 years and I have never lost as much as I have this year. Essex used to have a lot of pigs but as far as me and several friends can work out, there are 4 independant commercial herds left in the county
 

Renaultman

Member
Arable Farmer
Location
Darlington
I had the theory that multiple things might help, however the arable had poor yields and the pigs will eat it all, there is little hay to sell as it was rubbish. The subsidy is very handy but contract charges and chemical bills are taking most of that. Cattle sales were good and so were sheep but they are small in comparison to the costs of raising pigs.

I have had a similar sized herd of pigs for almost 40 years and I have never lost as much as I have this year. Essex used to have a lot of pigs but as far as me and several friends can work out, there are 4 independant commercial herds left in the county
I feel for you hopefully the pendulum will swing the other way for you soon.
 

SRRC

Member
Location
West Somerset
Typical government, just throwing out cash. Won't ever be paid back. I'd start smashing companies and the rich with some serious taxes until this is all paid back.
Yes it does offend our delicate sensibilities. But it did achieve it's objective of getting cash into the system to lubricate the economy so that it didn't sieze up, we didn't have an economic recession.
As long as the money was flowing around the economy then that objective was met, to that end dodgy activity is just as useful as straight.
 
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AT Aloss

Member
BASE UK Member
Back on my favourite subject - BANKS

Didn't think it'd be long before they started using Bounce Back Loans as leverage. Been paying this one back since May 2021. We have a shop in a touristy area & it died a death during COVID. Normally pretty good turnover & it's profitable, but accounts during COVID weren't great.

My attitude was that it was a cheap loan, so why should I pay it back when an overdraft costs more. But they don't want you to do that, they want to sell you the expensive borrowing. So they're using the fact you have taken out a BBL to suggest you're distressed, which also shoves up rates or worse. Time to get it paid off methinks.

So if you took out a BBL to help prop up your B&B or your holiday cottages, watch out - they might be coming for you soon.

Below is a snippet of the banking foresight that is as visionary as driving by looking in the rear view mirror.

Forewarned is forearmed.

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icanshootwell

Member
Location
Ross-on-wye
Why so? It’s just another source of lending, and a very cheap one at that.

The first thing I did with mine was pay down a couple of finance agreements, effectively moving those debts from 7% to 2.5% interest. It’s just another business tool.
I paid my over draft off with mine, just when the banks had put there charges up, massive saving over the year, probably 3 to 4 grand. Payed a 3rd back so far and still in the black.
 

Hfd Cattle

Member
Mixed Farmer
Location
Hereford
A builder not far from here took the maximum BB loan when it first came out . Sold up just after the first lockdown and buggered off to France . He said to me "I have no intention of paying it back" ...... and as far as I know he has made no payments .
 

AT Aloss

Member
BASE UK Member
Will you get your overdraft back though? That was my fear so I didn’t go for one.
Until banks settle down & realise that the current commodity price trend channels are the new normal, in their eyes the Ukraine conflict has resulted in a riskier lending environment. Add to that there's less dirty money sloshing about in the overnight lending exchanges (the life blood of Britain's big banks) I think they're going to get windy about funding expensive inputs, so if you've made a few quid keep it in a slush fund somewhere & try to maintain your existing facilities.
 

Renaultman

Member
Arable Farmer
Location
Darlington
Until banks settle down & realise that the current commodity price trend channels are the new normal, in their eyes the Ukraine conflict has resulted in a riskier lending environment. Add to that there's less dirty money sloshing about in the overnight lending exchanges (the life blood of Britain's big banks) I think they're going to get windy about funding expensive inputs, so if you've made a few quid keep it in a slush fund somewhere & try to maintain your existing facilities.
I've just set up a business deposit account for the first time ever, seems insane to be paying 3.5% while earning 0.5% but that BB money was cheap and is becoming cheaper so I think I will stick with my insanity.
 

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Five nature-recovery projects spanning 100,000ha launched

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Written by Michelle Martin from Agriland

Image-source-Savills-field-640x360.jpg
Five nature-recovery projects spanning nearly 100,000ha across the West Midlands, Cambridgeshire, the Peak District, Norfolk and Somerset have been announced by the government and Natural England today (Thursday, May 26).

This is the equivalent in size to all 219 current National Reserves.

The aim of the projects is to deliver nature recovery at a landscape scale, helping to tackle biodiversity loss, climate change and improve public health and well-being.

All five projects will make a significant contribution towards the national delivery of the international commitment to protect at least 30% of land and...
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