At the same time, the government announced plans to provide an extra £10m of funding. However, in a BBC report, hauliers were reported to view the scheme as “laborious and incredibly complex”.

Available grants

Businesses can apply for up to three different grants in connection with the completion of customs declarations.

1. Funding to train those involved in the completion of customs declarations and the creation of the necessary processes.
2. Funding to allow customs intermediaries to hire new staff in connection with the completion of customs declarations.
3. Funding to facilitate IT improvements designed to make the completion of customs declarations by customs intermediaries more efficient.

Who can apply?

Businesses established in or with a branch in the UK when the grant is paid can apply for any or all of the grants for which they qualify.

However, there is a sting in the tail since grants will be withheld from any businesses that have previously failed to meet their tax obligations. HMRC threatens that “we’ll check our records to decide if we can offer your business a grant”.The guidance is silent as to the duration of this threat.

Recruitment grant

The business must currently complete customs declarations on behalf of importers and exporters and have been established in the UK for at least 12 months.

Training grant

The business must either:

• complete customs declarations on its own behalf or for someone else (or intend to in future); or,
• import from or export to the EU and complete customs declarations (or intend to do so in future).

IT improvements grant

The business must comply with three requirements:

1. Currently complete customs declarations for importers and exporters
2. Have 250 employees or fewer
3. Have an annual turnover of less than €50m.

Recruitment

The funding must be used to cover the recruitment and salary costs of new employees from 1st October 2019. Those staff must help complete customs declarations.

Training

The training does not have to lead to a formal qualification but must give employees the skills to:

• Complete customs declarations
• Carry out customs processes, which could include safety and security
• Help other businesses with import and export processes.

The training can be internal or external. If it is internal, qualifying costs would include delivering the training, related stationery, room hire and catering and other similar costs. If the trainer was recruited in-house, a reasonable day rate can be applied.

The funding cannot be used towards the cost of current training or for other unrelated training.

One valuable concession is the ability to use the grant in respect of any relevant training since 31st July 2019.

IT improvements

The funding must be used to buy software that will help the business to complete customs declarations more efficiently. It must be a ready-made solution, not bespoke software and cannot include unrelated networking costs.

The funding can also be used to

• Buy hardware needed for the software to run
• Install and configure the software and hardware
• Buy the first-year licence
• Train employees to use the software

Once again, this expenditure can be backdated to 31st July 2019.

Amounts of funding available

Recruitment grant

£3,000 for each employee, plus up to £10,000 for any employee recruited before 31 January 2020, to cover up to 3 months’ salary. It is assumed that these are mutually exclusive, although this isn’t absolutely clear.

Companies will receive recruitment costs plus up to 50% of eligible salary costs upfront. The remaining salary costs will be paid once the employee has been in post for one month.

Training grant

Up to 100% of the cost of training with a limit of £2,250 per course. In addition, up to £250 can be claimed per employee for internally-run courses.

IT improvements

Up to €200,000. Ironically, this is the maximum amount of State Aid available under what will be former European legislation.

Information to apply

For each business, it will be necessary to supply

• Registered name and number
• Contact details
• VAT number (if applicable)
• Unique Taxpayer Reference (UTR)
• Most recent utility bill

Specific information with regard to the relevant grant will also be requested as follows.

Recruitment

• A brief statement explaining how the monies are to be used
• A note as to why the business will need more staff
• The stage the recruitment process has reached
• Reasons for expecting to have any new staff employed before 31st January 2020

To get the second 50% of eligible salary costs, businesses will need to provide for each new employee:

• Their contract of employment
• First month payslip

Training grant

• A quote for the cost of the training
• The CV of any internal trainer

IT improvements grant

• Details of the software to be purchased
• Quotes for the cost of buying and installing the software, training employees to use it and the cost of any related hardware

Administration

In an unusual move, this process has been wholly outsourced to PricewaterhouseCoopers. An application can be made at the following link. If an application is successful, a grant offer will be issued.

Businesses will then need to submit proof of how much they spend on IT improvements or training within two months. The grant should then be paid to a UK bank account within 30 days via BACS.

Tax treatment

Effectively, any payments covered by a grant will be ineligible for tax relief. With regard to expenditure on capital items such as IT equipment, allowances can be claimed. Any supplementary amounts that are not covered by grants will, of course, be eligible for tax relief.

Conclusion

While most of the processes are self-explanatory and mechanical, is worth flagging up the constraint which states that any claimant that has failed to comply with its tax obligations (at any time) need not apply because their request for a grant will be refused.

 

Noel Guilford