Grants and Funding for Small Businesses and the Self-Employed During COVID19

Many small businesses and self-employed people are facing a very difficult time at the moment due to the coronavirus pandemic. Ever since the pandemic hit and the Chancellor announced the furlough scheme for PAYE employees to receive 80% of their salary up to £2500 per month, small businesses and the self-employed have been wondering when support would arrive for them. Well, thankfully support has arrived for the self-employed and small business owners. We are in very difficult times and therefore we need to consider all options of support that is available to our businesses and personally at this point in time.

The support available is as follows.

Cash Grants to businesses affected by COVID-19

Small Business Grant Fund (SBGF) – Coronavirus

A one off £10,000 small business grant to the ratepayers of properties with specified uses in receipt of:

  • the Small Business Bonus Scheme (SBBS) or Rural Relief,
  • or eligible for SBBS but in receipt of Nursery Relief, Disabled Relief and the Business
  • Growth Accelerator.

Retail Hospitality and Leisure Grant Fund (£25,000 grant to the ratepayers of properties in the retail, hospitality and leisure sectors)

Available to the registered ratepayers of businesses in the retail, hospitality and leisure sectors operating in premises with a rateable value of £18,001 or up to £51,000.

Second phase of funding to protect against the effects of COVID 19

The new package of measures includes 120 million to extend the Small Business Grant scheme to ensure that, in addition to a grant on the first property, small business rate payers will be eligible to an additional grant on all subsequent properties

Extend eligibility for the £10,000 Small Business Grant to ratepayers with multiple properties with individual rateable values under £18,000 but whose cumulative rateable value is between £35,000 and £51,000.

Support for the self-employed during COVID-19

Coronavirus 80% support package for UK Sole Traders

The government will pay self-employed people a taxable grant based on their previous monthly earnings over the last three years, worth up to 80% of their earnings and capped at £2,500 a month. To be eligible, you must have annual average “profits” (self-employed earnings) of less than £50,000 a year, according to HMRC. The Chancellor Rishi Sunak has said that HMRC will contact those who are eligible around the middle of May, to invite them to apply for the grant. 

Additional Support will be broken into three separate funds as follows:

• £34 million Newly Self-Employed Hardship Fund, managed by Local Authorities, will be allocated to the newly self-employed facing hardship through £2,000 grants

• £20 million Creative, Tourism & Hospitality Enterprises Hardship Fund, managed by the Enterprise Agencies in partnership with Creative Scotland and VisitScotland for creative, tourism and hospitality companies not in receipt of business rates relief

• £45 million Pivotal Enterprise Resilience Fund, managed by the Enterprise Agencies for vulnerable SME firms who are vital to the local or national economic foundations of Scotland

The Coronavirus Business Interruption Loan Scheme (CBILS)

UK Government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims)

  • No charge to businesses or banks from the UK Government
  • Supports loans of up to £5 million.
  • Interest free for the first 12 months – interest payments are covered by the UK Government
  • Your business must be UK based with turnover of no more than £45 million per year.

Your business meets the other British Business Bank eligibility criteria here:

Coronavirus Job Retention Scheme

The Government will continue paying part (80%) of their employees’ salary for those employees that would otherwise have been laid off during this crisis.

It is up to a maximum of £2,500 per month.

You will need to: 

  • designate affected employees as ‘furloughed workers,’ and notify your employees of this change
  • Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

HMRC Time to Pay (VAT Deferral / Income Tax Payments Deferral)

For VAT, the deferral will apply from 20 March 2020 until 30 June 2020. 

All businesses are eligible.

This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period

If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021

This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period

Statutory Sick Pay / Statutory Guarantee Pay

Allows small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19.

This refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19.

Business rates during COVID-19

Business Rates (All Businesses)

  • 1.6% relief for all properties, freezing the poundage rate next year
  • Directly applied to business rates bills from 1st April 2020.
  • Business Rates (Specific Sectors)
  • A full year’s 100% non-domestic rates relief for retail, hospitality and tourism business ratepayers
  • Rates holiday for 2020/21 tax year
  • Directly applied to business rates bills from 1st April 2020

Three Month Mortgage Holiday – Coronavirus

If you’re adversely affected by coronavirus, the Government has confirmed that you may look to take a mortgage payment holiday on your residential or Buy to Let mortgage for up to three months to help your financial situation. Contact your bank or your mortgage lender to enquire about the mortgage holiday system.

The situation changes all the time and therefore the above will continue to develop in the coming days.

Best wishes over this difficult time.