COVID-19 advice and updates
for SMEs and the self-employed

COVID-19 SMEs and self-employed

The current pandemic is worrying for businesses and the self-employed. Unprecedented measures are being introduced almost daily.

The situation is so fast-moving that it can be easy to miss out on announcements that affect you.

To help you cut through the noise, we’ve prepared this page to guide you through the latest advice and opportunities. Please bookmark it – we will be updating it daily if we need to.

COVID-19 INFORMATION FOR BUSINESS

  1. Help with finances / cashflow
    1. BOUNCE BACK LOAN SCHEME
      SMEs can borrow between £2,000 and 25% of their turnover
      (up to £50,000) via this 100% government guaranteed loan scheme. Available via accredited lenders, you don't have to make repayments or pay interest on loans for the first 12 months. After 12 months the interest rate will be 2.5%. You can find more information here.
    2. CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME
      This scheme is now available. Delivered by the British Business Bank via participating providers, it offers loans of up to £5m that are 80% backed by government. Government will also cover the initial 12 months of interest payments. 
      To qualify, your business must:

      1. Have a turnover of £41m or less
      2. Operate within an eligible industrial sector (see restrictions, below)
      3. Have a strong borrowing proposal, but insufficient securityAs of 3 April, insufficient security is no longer a condition of access to the scheme.
      4. Full sector restrictions are published here (PDF file). Finance terms range from three months to ten years, depending on the type of loan.

      Full details on how to apply are available here.

    3. CORONAVIRUS LARGE BUSINESS INTERRUPTION LOAN SCHEME
      CLBILS also gives lenders a government-backed partial guarantee (80%) against the outstanding balance of the facility. Lenders can provide:

      1. Up to £25m for businesses with turnover between £45m and £250m
      2. Up to £50m for businesses with a turnover of £250m +

      It is also possible to access loans and other types of finance up to £200m. However, if you borrow more than £50m, you must agree to restrictions on dividend payments, senior pay and share buy-backs during the period of the loan. Full details are available here.

  2. Help with paying employees
    1. JOB SUPPORT SCHEME
      This scheme replaces the Coronavirus Job Retention ('Furlough') Scheme, which ends on 31 October. The scheme begins on 1 November and will run for six months. The government will pay a third of hours not worked up to a cap, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, where the government contribution has not been capped.
      Full details are available here.
    2. HELP WITH SICK PAY
      If you are paying employees who are ill with COVID-19, government will refund up to two weeks’ worth of Statutory Sick Pay (SSP). Details of repayment mechanisms will be published in due course. Your business is eligible if you employed fewer than 250 employees as of 28 February 2020. Full information is available here.
  3. Help with tax
    1. VAT
      The VAT deferment scheme ended on 30 June 2020. If you deferred payments, you can repay them in smaller amounts over a longer period, interest free. You need to opt in to this scheme. Find out how to do this here.
  4. Help with business rates
    1. HELP FOR RETAIL, HOSPITALITY & LEISUREBUSINESSES
      If your business is in the retail, hospitality, leisure or nursery industry, then you could qualify for a business rates exemption covering the 2020-21 tax year. Full details are here.

For the latest government updates on support for businesses, visit this page: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

 INFORMATION FOR THE SELF-EMPLOYED

  1. Help with income
    1. SELF-EMPLOYED INCOME SUPPORT SCHEME (Round 3)
      Applications for Round 2 of this scheme ended on 19 October. Round 3 is significantly less generous.

      • Round 3 will give the self-employed a taxable grant worth 20% of their average monthly profit (over the past three years), up to £1,875 in total
      • Round 3 will cover the period from 1 November to 31 January.
      • Round 4 will cover the period from 1 February to 30 April. The level of this grant has not yet been set.

       

      To qualify, you must:

      • Already be self-employed and have submitted a tax return for 2019. If you haven’t, you have 4 weeks from today to do so.
      • Make the majority of your income from self-employmentIf you are eligible, you will be contacted by HMRC.
      • Have trading profits of less than £50,000 in 2018-19, or average trading profits of less than £50,000 in 2016-17, 2017-18 and 2018-19. In both cases these profits must constitute more than half your average taxable income over the period.

If you are eligible, you will be contacted by HMRC. Details on the scheme are available here.

    1. BENEFITS / SICK PAY
      Every self-employed person can now access Universal Credit at a rate equivalent to Statutory Sick Pay for employees
  1. Help with tax
    1. INCOME TAX
      Income Tax payments due in July 2020 are now deferred until January 2021
      under the Self Assessment system
  2. IR35 changes
    1. DELAY TO IR35 CHANGES
      IR35 changes were due to be introduced in April this year. The government has just announced an IR35 delay. IR35 reforms will now be introduced on 6 April 2021.

FURTHER LINKS ON CORONAVIRUS

For the latest coronavirus news stories and blog posts, please visit the following links:

COVID-19 business news and blogs

Read More

COVID-19 personal news and blogs

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