Coronavirus - Help for Small Business

Many small businesses have been forced to close due to measures brought in by Boris Johnson to slow the spread of the Coronavirus, with only the most essential providers being permitted to continue to trade. This has meant huge disruption and a large scale shut down with business owners, employees and those in the gig economy wondering what this means for them financially.

In this article we aim to provide an overview of the help available and details of how to apply for the support you need.

For Small Businesses including sole traders and employers

Coronavirus Job Retention Scheme (CJRS) –  providing a tax free grant for all employers up to the value of 80% of employees total wage costs (including employees gross pay before tax, employers national insurance and employers pension contributions at 3% of qualifying earnings). The scheme has been extended until the end of October 2020 with changes to the scheme announced on 29/05/2020.

Statutory Sick Pay (SSP) Refund – where employers have employees who are off sick as a result of  Coronavirus, HMRC will provide a refund of up to 14 days statutory sick pay at £94.25.

Deferment of VAT payments – VAT registered businesses can choose to defer VAT payments becoming due between 20th March and 30th June 2020. The shortfall in payments must however be made up before 31st March 2021.

Deferment of Income Tax Payments – Directors who pay income tax on dividends through the self assessment system can choose to defer their payments on account which are due on 31st July 2020 until 31st January 2021. Be aware however that on filing your 19/20 tax return you may have an additional payment to made alongside any income tax shortfall as a result of deferment.

Time to Pay Arrangements –  In addition to the above support, businesses can contact HMRC to discuss Time to Pay arrangements in relation to other liabilities that will become payable such as PAYE/NIC and Corporation Tax payments. HMRC has a dedicated helpline – 0800 0159 559.

Business Rates Holidays – Businesses in the retail, hospitality and leisure sector alongside nurseries on Ofsted’s early years register, will not be required to pay any council tax in the 2020/20201 tax year. Local authorities will be contacting eligible businesses and reissuing bills as required. To find out who your local authority is use the following link:

Small Business Grant Fund (SBGF) / Retail, Hospitality and Leisure Grant Fund (RHLGF) – Businesses in the retail, hospitality and leisure sector will be eligible to apply for a cash grant from their local council. Such businesses will soon receive further information and details of how to make applications. Those with a rateable value below £15,000 will be eligible for a grant of £10,000 and those with rateable values between £15,000 and £51,000 may received up to £25,000.

Coronavirus Business Interruption Loan Scheme (CBILS) – A loan scheme for businesses facing loss of income as a result of the Coronavirus. The scheme provides government guaranteed loans, overdrafts and invoice/asset finance of up to £5 million to businesses. The business must have been a going concern prior to the COVID-19 outbreak and normal lending rules do apply. Personal guarantees are not required for finance provided which is below £250,000 and interest/payment holidays are available. Business owners are advised to initially contact their own bank for further information, some small businesses have raised concerns over the level of interest rates being charged.

Coronavirus Bounce Back Loan (BBLS) – A second loan scheme launched to support businesses with smaller, security free loans up to 25% of turnover. The loans provide 100% government guaranteed loans of up to £50,000 for businesses affected by the Coronavirus crisis. The loans offer a low fixed rate of interest at 2.5% and there are no payments for the first 12 months. Businesses are advised to first approach their own bank for assistance and further information can be found on the British Business Bank website.

Commercial Eviction Protection – Commercial tenants will not face eviction if they cannot meet their rent payments as a direct result of the Coronavirus outbreak. Commercial rents due during this period will still become payable but such protection prevents the issue of eviction notices and initiation of associated proceedings.

For the Self Employed

Self Employment Income Support Scheme – a taxable grant equal to 80% of taxable profits over the last three years. The scheme is available to those with a taxable profit of less than £50,000 who have submitted a tax return between 16/17 – 18/19.

Universal Credit (UC) – The benefit scheme is being made available to the self employed who can access sick pay at £94.25 per week. Additional benefits are available including housing and employment support allowance. The treasure announced that UC can be claimed in addition to the self employment scheme grant and individuals can continue to undertake work. Of course the greater the income the less benefit that will be received.

For Individuals

Hardship Fund – Individuals can make an application to their local authorities hardship fund which provides additional support relating to council tax payments and housing benefit.

Mortgage and Creditor Payment Holidays – We understand that for many small business owners they have personal mortgages, loans and credit card payments to meet alongside securing the future of their businesses during this crisis. Many lenders are providing payment holidays which do not affect credit ratings and waiving late payment fees. You should get in contact with individual creditors to understand their current policies. The Money Advice Service and the Citizen’s Advice Bureau (CAB) also have a wealth of useful information available providing support and guidance during this difficult time.