UK Gov Small Business Assistance
4 min read
As with many countries around the globe, the UK government has stepped in to provide a range of important measures designed to mitigate the negative effects of COVID-19 on businesses.
A range of grants, benefits, concessions and deferrals have been made available to UK small businesses to help you ride the storm.
Let’s take a look at the government assistance on offer. Pick through the details and be aware of where you stand and what you can receive.
Job retention scheme
This is a UK-wide initiative devised to keep employees paid and businesses afloat. If you’re a small business, are COVID-19 affected and have employees on the payroll you’re struggling to pay – this is for you.
If you cannot maintain your workforce because your business operations have been severely impacted by COVID-19, you have an option to furlough employees and apply for the job retention scheme to cover wages.
The primary details:
- Claim for 80% of your employee’s wages if they have been furloughed.
- Payments are up to £2,500 a month per employee.
- This is a short-term measure and will only be in place for four months starting from March 1, 2020 (and may be extended if necessary).
- Employees can make a claim for Universal Credit while they wait for the grant.
Paying sick pay
If your employees are sick during this period, there’s relief for employers.
Dubbed the ‘Coronavirus Statutory Sick Pay Rebate Scheme’ the scheme will pay you back the standard SSP which you pay to employees for periods of sickness starting on or after March 13, 2020.
The repayment will cover up to two weeks of sick leave if an employee is unable to work because they:
- have coronavirus
- cannot work because they are self-isolating at home
- are shielding in line with public health guidance.
There will be no requirement for doctor’s notes.
Deferral of VAT
If you have your VAT due between March 20 and June 30 this year, you have the option to either defer the payment or pay as per usual. It’s up to you and contingent on your personal circumstances.
- You must continue to submit your VAT regardless of the decision to defer or not.
- No interest or penalties will be charged if you choose deferral.
- VAT payments which fall due after June 30 will have to be paid as normal.
Deferral of your Self Assessment tax bill
Ordinarily, as you’re likely aware, there are two payment deadlines for Self Assessment:
- January 31 – for any tax you owe for the previous tax year.
- July 31 for your second payment.
The second payment on July 31 can now be deferred until January 31, 2021. This is also up to you and personal circumstances prevail.
Having trouble paying your tax bill?
If you have a late tax bill and this can’t be relieved through VAT deferral or Self Assessment deferral, please contact the HMRC coronavirus (COVID-19) helpline if you’re struggling to pay tax due to COVID-19.
Tailored tax assistance may be offered by the HMRC, depending on your personal position. They’ll be experiencing high demand and possibly long wait times, so apply early and please be patient.
Business rates relief available
The UK government is extending rate relief for businesses in certain categories. This will alleviate the need to pay council rates for the 2020/21 fiscal year.
It’s essentially a ‘rates holiday’ for those who are eligible.
There are three primary categories: retail hospitality and leisure, nurseries and small businesses.
Retail hospitality and leisure
Special rates concessions have been made available for the hardest hit sectors in England.
Businesses in the following categories will pay no rates for the 20/201 financial year. You’re eligible if your business property is a:
- restaurant, café, bar or pub
- cinema or live music venue
- assembly or leisure property – such as a sports club, gym or spa
- hospitality property – for example, a hotel, a guest house or self-catering accommodation.
This rate holiday will be applied automatically by your council. You don’t need to do anything. Only contact your council if you aren’t receiving what you believe you’re entitled to.
If you run a nursery in England, you’ll also qualify for a rates holiday for the 2020/2021 financial year.
The following criteria will apply:
- You’re on Ofsted’s Early Years Register.
- You provide care and education for children up to five years old.
- Local authority-run nurseries are not eligible.
As above, this rate holiday will be applied automatically by your council. You don’t need to do anything. Only contact your council if you believe you aren’t receiving what you believe you’re entitled to.
Other small businesses may also be eligible for rates relief (Small Business Rate Relief (SBRR) Scheme).
Please be aware that you’ll have to apply for this relief directly with your council. This will not be automatically applied as above.
Find more details on contacting your council about rate relief.
Essentially, your small business will not pay business rates on a property with a rateable value of £12,000 or less.
There’s a sliding scale of relief from 100% to 0% if your rateable value is between £12,001 and £15,000.
- Your property’s rateable value is less than £15,000.
- Your business only uses one property (there may still be a tailored solution if you have more than one property).
Business support grants
There’s direct cash relief available for businesses suffering COVID-19 related cashflow issues. These grants are designed to buoy the economy and increase business survivability during this tough time.
There are two separate grants here:
- the Small Business Grants Fund (SBGF)
- the Retail, Hospitality and Leisure Grant Fund (RHLGF)
Both grant funds will be managed by your local authorities and they should be in contact with you directly, if you qualify.
Let’s explore them both and ascertain how your business can benefit.
Small Business Grants Fund
If you’re a small business, are eligible, and in receipt of either Small Business Rates Relief (SBRR) or Rural Rates Relief (RRR) in the business rates system, you’ll receive a payment of £10,000.
This means you’ll have a rateable value between £0 and £15,000.
- Businesses which are not ratepayers in the business rates system are not included in this scheme.
- As of March11, must have qualified for rate relief (SBRR) or Rural rates relief (RRR).
- One grant per property.
- Cannot be a property occupied for personal use.
- Cannot have been in liquidation as of March 11, 2020
- Cannot be a car park.
Retail, Hospitality and Leisure Grant Fund
Is your business in the retail, hospitality or leisure sector? You may also qualify for a business grant.
Properties in these categories, which on the March 11, 2020 had a rateable value of less than £51,000, are eligible for the grant.
- Business properties must have a rateable value of £51,000 or less.
- Recipients will receive one grant per eligible property.
- Recipients cannot receive both SBGF and RHLG on the same property.
- Cannot be a property occupied for personal use.
- Cannot have been in liquidation as of March 11, 2020.
- Cannot be a car park.
Are you self-employed? Is your business suffering due to COVID-19? You could be eligible for cash grants to help you manage this pandemic.
Similar to the job retention scheme, this scheme will allow you, as a self-employed entity, to claim a taxable grant worth 80% of your trading profits and up to a maximum of £2,500 a month.
The self-employed grant will be initially available for three months only, yet it may be extended due to prevailing conditions.
Eligibility for the self-employed:
- You have submitted your Self Assessment tax return for the tax year 2018 to 2019.
- You traded in the tax year 2019 to 2020.
- You’re trading when you apply, or would be except for COVID-19.
- You intend to continue to trade in the tax year 2020 to 2021.
- You must have lost trading profits due to COVID-19.
- You’re able to prove to the HMRC that your business has been adversely affected by COVID-19.
- Your trading profits must also be no more than £50,000.
- You can make a claim for Universal Creditwhile you wait for the grant.
Loan scheme for small and medium-sized businesses
If you’re a small to medium business and in need of a cashflow injection, the government has hammered out a deal to subsidise and support the process of receiving a business loan. The idea is to incentivise business lending and borrowing.
Dubbed the ‘The Coronavirus Business Interruption Loan Scheme (CBILS)’, the aim is to help businesses who turnover less than £45 million to access loans, overdrafts and asset finance worth up to £5 million for six years.
The scheme will be delivered through approved banks and financial institutions backed by the government-owned British Business Bank.
- Loans are up to £5 million for six years.
- The government will provide lenders with a guarantee of 80% on each loan.
- The government will also cover the first 12 months of interest payments and any lender-levied fees.
- This scheme will give lenders further confidence in continuing to provide finance.
- Your business must turnover less than £45 million.
- Your business must be based in the UK.
- You must have a solid lending proposal that would be acceptable before the COVID-19
- You can provide evidence your business has been negatively affected by COVID-19.
Future financing for innovative businesses
A yet to be detailed scheme called the Future Fund has been established for businesses that rely on equity investment and are ineligible for the Coronavirus Business Interruption Loan Scheme.
These are loans that need to be backed one for one by private investment.
Essentially the government may provide loans between £125,000 to £5 million for those businesses that can match the loan with private investment. The loan will be backed by the British Business Bank.
What we know about eligibility:
- You must be a UK based business.
- You can attract an equal investment from private or third-party sources.
- Your business has previously received at least £250,000 in investment from third-party investors in the last five years.
Details are forthcoming and there’s no online application process yet. Watch this space.
Well folks, that’s it for now. UK government support will undoubtedly be evolving as we roll through this storm, so stay informed and stay safe everybody.