Since the UK lockdown was announced, businesses and self-employed workers across the country have been forced to temporarily close or drastically change the way they work.
In light of these unprecedented times, the Government has announced a £330 billion coronavirus fund in a bid to boost the economy and avoid widespread bankruptcies and redundancies.
There is now a wide range of schemes available to UK businesses and self-employed people including Government backed business loans, deferral of VAT, income support and job retention schemes.
Find out more about the new schemes available, how they can be utilised and who is eligible in our latest blog post.
Support for Businesses
Coronavirus Job Retention Scheme
Perhaps the most drastic of the measures announced by the Government was the job retention scheme, which allows some businesses to temporarily ask employees to stop working whilst keeping them on their payroll.
UK employers with a PAYE scheme can access the support which will see HMRC reimburse 80% of wages for ‘furloughed workers’ up to £2,500 per month. The scheme covers the cost of wages backdated to 1st March and is open for 3 months initially and is available to employers who meet the criteria set by the government in the link below.
This scheme is designed to discourage businesses from laying workers off, which would result in increased unemployment and would likely worsen the financial impact of the virus long-term.
If you’re an employer, use the GOV UK website to find out more about the Coronavirus Job Retention Scheme and if and how you can claim for your employees’ wages.
From 1st July 2020, the furlough scheme is changing. Find out more in our latest blog post.
VAT Payment Deferred
If you are a VAT registered business and have a payment due between 20th March 2020 and 30th June 2020, you have the option to defer this payment until a later date upto 31st January 2021. Use the GOV UK website to find out how you can defer your business VAT payment.
Support for Businesses Paying Sick Pay to Employees
Changes to the Statutory Sick Pay (SSP) legislation mean that it is now paid from the 1st day of absence from work rather than the 4th; this legislation applies retrospectively from 13th March.
To support small and medium-sized businesses from footing a potentially large SSP bill, the Government are allowing eligible businesses to reclaim 2 weeks SSP paid for sickness absence due to COVID-19. Check if you’re business is eligible on the GOV UK website.
Business Interruption Loan Scheme
The Coronavirus Business Interruption Loans Scheme is set up to support SMEs with access to Government guaranteed access to loans, overdrafts, invoice finance and asset finance of £5 million for up to 6 years. The finance is available from 40 lenders including all major UK banks.
The Government will make a payment to cover the first 12 months of the cost of the finance including interest payments and fees from lenders. Visit the GOV UK website to find out if your business is eligible for a business interruption loan.
Small Business Grants
For businesses that pay little or no business rates presently, the Government are providing additional funding through a Small Business Grant Scheme. This will provide eligible businesses with a one-off grant of £10,000 to help meet ongoing business costs.
Visit the GOV UK website to find out more about the Small Business Grant Scheme.
Support for the Retail, Hospitality and Leisure Sector
Business Rates Holidays
As the hospitality, leisure and retail sectors were severely impacted by the lockdown measures, the Government have introduced special measures for these industries including business rates holidays for these businesses in the 2020 to 2021 tax year.
Premises that will benefit from these holidays include shops, restaurants, cafes, cinemas, hotels, music venues, cinemas and many more. Visit the GOV UK website to find out more about business rate holidays for these industries.
Small Business Grants
Additionally, the Retail and Hospitality Grant Scheme has been set up to provide businesses in these industries with a cash grant of up to £25,000 per property.
This grant in paid direct from their council and the amount eligible businesses will receive is dependent on their rateable value.
Find out more about the Retail and Hospitality Grant Scheme on the GOV UK website.
Support for the Self-Employed
Self-Employment Income Protection Scheme
Perhaps the biggest challenge the Government has faced in terms of supporting the UK economy is how they could support the self-employed that have lost income due to coronavirus.
The Self Employment Income Protection Scheme allows the self-employed to claim a taxable grant from HMRC with up to 80% of trading profits for 3 months, with an upper limit of £2,500 per month.
One of the key criticisms of this scheme is that the self-employed cannot yet apply, they must wait for HMRC to invite them to apply online and will have to wait until June for payouts.This delay is in part to give those self-employed individuals an additional four weeks to submit late tax returns for the year ended 5th April 2019, to ensure they qualify and are included in the scheme. Use the GOV UK website to find out more about the Self Employment Income Protection Scheme.
Deferral of Income Tax Self Assessment Payments
If you are self-employed, any Self Assessment payments that are due on the 31st of July 2020 can be deferred until the 31st of January 2021. This is an automatic benefit and there are no penalties or interest for late payments. Visit the GOV UK website to find out more about deferring income tax self assessment payments.
Need a Hand?
At FCF, we understand that these are unprecedented times and our top priority over the coming months is to look after our clients and staff. We hope all businesses can utilise the help and support available to help them through these challenging times.
- Budget 2021 – Key Points & How They Impact You - March 8, 2021
- New Business Owner? Accounting Obligations for Limited Companies - February 15, 2021
- Taxation & Declaration of COVID-19 Government Support Payments - January 15, 2021
This post was written by Steph Roffey