Coronavirus – check what support is available for small businesses and the self-employed
Help is available and is constantly changing so it good to remain updated on the help and support that could be available to you. To help you navigate the support and get to the right place to find out more or make any relevant application, we have summarised the options available to you.
Cororavirus Job Retention Scheme
This is the scheme that was set up to help pay for furloughed employees’ salaries. If you have any staff that you have had to lay-off due to the pandemic the CJRS will pay a portion of the salary of your employee/s – up to a maximum of £2500.
In the 2021 Spring budget, it was announced that the scheme would be extended until 30th September 2021. Currently the grant available is 80% of wages upto the £2500 cap, however, from the 1st July 2021 the level of the grant available will be reduced with the employers contribution being 10% in July and 20% in August and September.
The contribution is not required for the hours that the employee doesn’t work – you will be only required to pay the National Insurance Contributions and pension contributions.
You can use flexible furloughing; full-time furloughing and you can also opt to top up your employees’ wages. Whilst on furlough your employees cannot undertake any work for you at all that provides money or services to you.
The Job Retention bonus that was announced which was a one-off £1000 payment for each employee that was kept on after furlough has now been postponed.
To claim – it works in the same way as when the scheme started. You can make a claim: –
- In respect of an employee for a minimum seven-day claim window
- In advance
You do not have had to use the scheme previously to make a claim – just by using a UK bank account and UK PAYE.
To apply the process includes: –
Identify your employees you wish to place on furlough – those who otherwise would have had to take unpaid leave.
Inform your employees in writing that they are now furloughed or will be on flexible furlough.
Use the Government calculator to work out how much you need to claim. You can ready more here.
Recovery Loan Scheme
This scheme was launched by Government on the 6th April 2021 to replace the previous Government guaranteed schemes that ended on the 31st March which includes the Bounce Back Loan Scheme and the Coronavirus Business Interruption Loan Scheme. The scheme will provide access for business to get between £25,000 and £10million, with the Government giving lenders an 80% guarantee – it will run from the 6th April until the end of the year.
You can access the scheme using the Government’s list of approved lenders which can be found here.
Protection if you can’t pay your rent – for commercial premises
This was an announcement made by Government to protect commercial tenants from eviction if they have been unable to pay their rent because of the pandemic.
The initial period it covered has been extended and it now due to end in June 2021. If you can pay rent you should continue to do so as this is designed for those businesses who are struggling the most.
Commercial landlords and tenants are being encouraged to come to voluntary agreements for any repayments due. There is a new Code of Practice which was released in June 2020 which was designed for landlords and businesses to work together on any payment issues. The Code of Practice is available to download here.
Self-Employment Income Support Scheme (SEISS)
The SEISS scheme consists of a series of grants that are designed to support and help self-employed people whose business has been adversely affected by the pandemic.
There is now a fourth grant available under the scheme which is to provide for February 2021 to April 2021 – it will pay 80% of your average trading profits for three months – capped at a maximum of £7,500.
The Government has also announced a fifth scheme which will cover May 2021 to July 2021 and will pay 80% of your average trading profits – if you have seen a drop in your turnover of over 30% or more – it will pay 30% if you haven’t been as severely affected.
The eligibility for both the fourth and fifth grant has been made wider – to be eligible you will have had to have submitted a 2019-20 tax return by midnight on the 2nd March. This has opened the grant for the newly self-employed.
You will need to show trading profits of no more than £50,000 and make no more than half of your income from being self-employed. The grant is taxable.
You may owe income tax and national insurance through the money you get through the scheme but this is a grant and not a loan so you are not required to pay the money back.
You can apply for the fourth grant in April – the date is yet to be released with the fifth grant available to apply for from July 2021. You will need your tax return from 2019-20 and you can’t be a limited company.
Some other criteria worth being aware of includes: –
- You traded in the tax year 2019-20
- You are trading when you apply or would be if the pandemic hadn’t stopped you from doing so
- You plan to keep trading in the tax year 2020-21
- Your lost trading profits due the pandemic
To be eligible for the fourth and fifth grant extensions, the Government says that you need to declare that you intend to continue to trade that you should be either: –
- Actively trading but facing reduced demand because of coronavirus
- Temporarily unable to trade because of coronavirus if you were previously trading
You do not need to have claimed for the previous grants to be able to claim for the fourth and fifth grants. You can find out more information and claim here.
Income Tax and VAT deferred for the self employed
It was announced in September 2020 that the self-assessment taxpayers could defer both their tax payments.
This enabled anyone who needed to pay upto £30,000 in tax by the 31st January 2021 could opt to make their payments in instalments which resulted in delaying full payment to 31st January 2022. Interest would be added to the balance owed from the 1st February 2021.
In addition the Government introduced a VAT deferral scheme which we covered earlier.
To benefit from the scheme you can use the HMRC’s Time to Pay service where you can defer your 31st January 2021 Self Assessment tax bill. Criteria is that you have no: –
Outstanding tax returns
Other tax debts
Other HMRC payments plans set up
The deadline is the 1st April 2021 to set up the Time to Pay arrangement for your Self Assessment Tax bill if you haven’t one up or paid already. Log into your Self Assessment account online where you may be able to do or ring the tax office.