While this is a stressful time for business, there are grants that the government are offering that you can find to get your business through. It can be difficult, though, to know what those are and where to find them.
This article will outline the options that have been made available by the chancellor and how you can access them. Think of this as your guide to financing your business during the COVID-19 crisis.
The chancellor has announced that some small businesses will be eligible for a government loan. So, is this you and how do you access it?
There is a Retail, Hospitality and Leisure Grant Fund which will be available to all businesses that fall into that category. There is also a Small Business Rate Relief (SBRR) or Rural Rate Relief. When this is in place, your local authority should be getting in touch with you if you are eligible.
Businesses with a property value that is over £15 000 but less than £51 000 will be eligible for £25 000 loan. A business with a property value of more than £51 000 is not eligible.
This will only apply to businesses in England as those in Scotland, Wales and Northern Ireland will have assistance from their own administrations.
Some businesses in Scotland can claim Small Business Bonus Scheme Relief, Rural Relief, Nursery Relief, Business Growth Accelerator Relief and Disabled Relief. You can apply for a one-off £10,000 grant from their local authority if you qualify.
In Northern Ireland, some businesses can apply online for a grant. Those businesses are ones that are eligible for the Small Business Rate Relief Scheme (this is those businesses with a Net Annual Value or NAV of £15,000 or below).
Businesses in Wales who are eligible for small business rates relief (SBRR) and have a rateable value of £12,000 or less should qualify for a £10,000 grant which will be administered by local authorities.
The government has also initiated a job retention scheme. This will allow you to cover some of the pay for employees that you place on temporary leave due to COVID-19, known as ‘furlough’.
This is a temporary scheme that will be available for at least 3 months. Employers will be able to claim 80% of their employee's wage up to £2,500 per month. They will also be able to claim Employment National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.
You will be eligible for this if you have created and started a PAYE payroll scheme on 28 February 2020. This is available for businesses, charities, recruitment agencies with workers on PAYE and public authorities.
This will apply to all your employees who are full-time employees, part-time employees, employees on agency contracts and employees on flexible or zero-hour contracts.
Deferral of VAT payments
Between 20 March and 30 June 2020, changes have been made to VAT payments for businesses so that they can better manage their cash flow. Businesses will have the option to either defer payments or to pay as usual.
HMRC will not charge penalties for any late payments due to the current crisis. If you have a direct debit set up in order to pay your VAT, contact your bank and cancel this.
A large portion of the country’s work force is self-employed. If this is you, you may have lost a portion of your income because of the COVID-19 crisis. The government has put in place a scheme in order to help you.
Those that are self-employed will be able to claim a grant that will cover 80% of your trading profits. This will be taxable and will only apply up to £2,500 profit a month. You must also have submitted your Income Tax Self Assessment tax return for the tax year 2018-19, have traded in the tax year 2019-20, and have lost trading/partnership trading profits due to COVID-19.
You will need to get more than half of your income from self-employment and your self-employed trading profits must also be less than £50,000.
Loans through the British Business Bank
Up to £5 million can be accessed through the British Business Bank and affiliates in the form of overdrafts, term loans, invoice finance and asset finance. This is through the Coronavirus Business Interruption Loan Scheme (CBILS) that has been put in place to provide support for SMEs in the UK that have had their cashflow disrupted due to COVID-19.
The borrower will remain liable for the debt, however, CBILS will encourage more lending because the lender is given a government-backed guarantee for the loan repayments.