There are several support measures that have been made available to help businesses through the covid-19 pandemic which are outlined below in turn.
Self-Employed Income Support Scheme
SEISS is a cash grant provided to eligible self-employed individuals who trade independently or through a partnership and have been adversely affected by the coronavirus pandemic.
HMRC are contacting individuals directly with regards to making a claim and you will have to self-certify that your business has been adversely affected.
Applications for the first SEISS grant are now closed, however, the second grant and final grant can be claimed on or before 19th October 2020 as long as your business was adversely affected on or after 14th July 2020.
The grant is based on your average trading profit over the tax years 2016-17 to 2018-19 and is worth 70% of your average monthly trading profit, paid out in a single instalment covering 3 months’ worth of profit and capped at £6,750.
Coronavirus Job Retention Scheme
The job retention scheme was put in place to protect employment where redundancies would have otherwise occurred because of coronavirus.
From 1st September, the government will pay a grant of 70% of wages up to a maximum cap of £2,187.50 for the hours the employee is on furlough.
From 1st October, the government will pay a grant of 60% of wages up to a maximum cap of £1,875 for the hours the employee is on furlough.
Employees must also have been furloughed previously for at least 3 consecutive weeks between 1st March 2020 and 30th June 2020 and employers will pay the employers NICs and pension contributions as well as topping up the employees’ pay to ensure they receive 80% of their regular wages up to a cap of £2,500, for the time they are on furlough.
The scheme closes completely on 31st October 2020.
Job Retention Bonus
The job retention bonus is a one-off payment to employers of £1,000 for every employee who they previously claimed for under the job retention scheme, and who remains continuously employed through to 31 January 2021. Eligible employees must earn at least £520 per month on average between 1 November 2020 and 31 January 2021.
Employers will be able to claim the Job Retention Bonus after they have filed PAYE for January 2021 and payments are due to be made to employers from February 2021.
Coronavirus Business Interruption Loan Scheme (CBILS)
The CBILs scheme provides financial support to smaller businesses (SMEs) that are seeing their cash flow disrupted because of coronavirus.
Loans and finance facilities of up to £5 million are being provided through the British Business Bank on repayment terms of up to six years. The government is providing the lenders with a partial guarantee (80%) against the balance of finance provided however, it is important to understand that the borrower remains 100% liable to the debt.
The government will also be covering the first 12 months of interest payments and any lender-levied charged for the borrower.
Loans under £250k will not require any personal guarantees however, this may be required for facilities provided above £250k at the lender’s discretion.
Borrowings can be in the form of loans, overdrafts, invoice finance and asset finance. Applications for CBILS will end on 30th September 2020.
Bounce Bank Loans
Bounce Back Loans are available to small and medium sized businesses, whether they are sole traders or an incorporated limited company, subject to certain criteria.
Loans are provided between £2,000 and 25% of the business’ turnover up to a cap of £50,000 and are 100% backed by the government. There are no interest or capital payments for the first 12 months after which the interest rate will be 2.5% a year.
Applications for Bounce Back Loans will end on 4th November 2020.
Small Business and Retail, Hospitality and Leisure Grant Fund
Small businesses who pay little or no business rates may be eligible to a one-off cash grant of £10,000 from their local authority however, businesses in the retail, hospitality and leisure industry can apply for a one-off cash grant of £25,000. You must apply directly to your local authority for the grant and be subject to certain eligibility checks.
Unfortunately, many local authorities are now closed for new applications for the Small Business Grant Fund but you should check with them directly.
Local Authority Discretionary Grant
Small and micro businesses with fixed property costs that are not eligible for the small business grant fund or the retail, hospitality and Leisure fund, may be eligible for the discretionary grants scheme.
Grants under this scheme can be up to £25,000 and are subject to certain eligibility criteria. The local authorities themselves have discretion about how to prioritise their allocation funding and so you should contact them directly about making a claim.
Business Rates relief
Businesses which operate in the retail, hospitality and leisure sectors in England will not have to pay business rates for the 2020 to 2021 tax year and neither will nurseries who are on Ofsted’s Early Years Register and provide care and education for children up to 5 years old (excluding local authority-run nurseries).
In Scotland, all non-domestic properties will get a 1.6% rates relief as well as the retail, hospitality and leisure sector receiving 100% rates relief.
Rates relief is applied automatically by your local authority.
Bracey’s are here to help your business
We can help you and your business navigate these measures and get access to the support you need. Get expert advice to ensure your business gets the financial support it needs.