A breakdown of the financial help available for small businesses during the Coronavirus outbreak

21st April 2020

When lockdown was introduced to the UK a few weeks ago, along with it came a multitude of uncertainty for businesses and the economy.

As a business leader, your concerns will no doubt range from the wellbeing of your staff to the long-term success of your business. The good news is, the government has introduced a whole set of measures including financial help to support businesses to stay afloat during these uncertain times.

While the range of schemes offer many solutions for small businesses who may be struggling during the pandemic, the sheer number of them can cause confusion and worry. If you’re not sure which schemes are right for you, we’ve broken down each into all the bits you need to know.

Financial help for workers

Furloughing your staff

Through the Coronavirus Job Retention scheme, you can temporarily furlough your employees if their work isn’t currently required. In simpler terms, this means you can ask your staff to temporarily stop working and 80% of their wages will be covered by the government.

If you’re unable to continue trading or need to reduce your workforce for the time being, you can claim a government grant to cover 80% of employee wages up to £2,500 per employee, per month.

From March 1st 2020, this scheme will run for three months, with the possibility of an extension. The online service isn’t available just yet, but it is expected to be live by the end of April.

We know that this is a service many businesses are either already using or are planning to use in the near future, so we’ve detailed exactly what the scheme entails, as well as answering all of your FAQs. Check it out on our blog, here.

If your staff are off sick with coronavirus symptoms

The Coronavirus Statutory Sick Pay Rebate Scheme will repay statutory sick pay (SSP) for anyone who cannot work either due to a coronavirus diagnosis or needing to self-isolate at home due to symptoms. It covers sicknesses that began after the 13th March 2020 and the scheme currently has no end date.

Two weeks’ worth of sickness can be covered by the scheme and there’s no need for the employee to obtain a doctor’s note. It’s important to note that other types of sicknesses are not covered during the pandemic so for example, if a staff member was unable to work due to a migraine, this would be covered by standard sick pay guidelines.

Also, if your employee benefits include offering higher rates of sick pay than SSP, you wouldn’t be able to claim the extra. Unfortunately, you can’t claim more than the standard rate of SSP.

To qualify for the Coronavirus Statutory Sick Pay Scheme or the Coronavirus Job Retention Scheme, employees must have been signed up to a PAYE payroll scheme on or before 28th February 2020 but can hold any type of employment contract.

More information here.

Paying your wages if you’re self-employed

The nature of self-employment usually means that if, for whatever reason, you are unable to work, then you are unable to make money. In the current climate, this is a particular worry as many people are unable to continue their usual work within the government’s social distancing guidelines.

If you’re self-employed and you’ve lost income due to the coronavirus outbreak, you can claim through the Self-employment Income Support Scheme for 80% of your profits, up to £2,500 a month. This scheme is essentially the self-employed version of the Coronavirus Job Retention Scheme and works in a similar way.

To be eligible, you must have been trading in the tax year 2019-2020, currently would be (if not for the pandemic) and plan to continue trading once the outbreak is over.

More information here.

Financial help for businesses

Help with tax payments

As part of the measures to help businesses during the coronavirus outbreak, the government have introduced tax deferrals. Depending on the size and nature of your business, not all schemes will be relevant to you so be sure to check.

Deferring VAT payments

If you’re a UK VAT paying business, you can defer VAT payments due between 20th March 2020 and 30th June 2020. They won’t be written off forever, but you will have until 31st March 2021 to pay what you owe.

The aim of this scheme is to give the economy, and therefore your business, the chance to return to normal operations (or as close to as possible) meaning that you’re paying when you’re able to.

You won’t need to tell HMRC about your choice to defer but you will still need to submit your VAT returns on time.

More information here.

Deferring sell assessment tax bills

Another deferral option is for self-assessment tax bills. The second payment of self-assessment tax bills for 2020 are due to be paid by 31st July but can be deferred until 31st January 2021. Again, you don’t need to let HMRC know about your deferral but you need to make sure you’ve paid by the deadline.

If you’d prefer to pay in smaller installments, you can use a budget payment plan to pay throughout the year.

More information here.

A relief from business rates

Business rates holidays are available for the following types of businesses:

  • Nurseries
  • Retail
  • Hospitality
  • Leisure

This means that businesses in those sectors will not need to pay rates for the 2020-2021 financial year. Local councils will automatically apply the discount so there’s no need to apply. Depending on your industry, different rules apply but you can use the government business rates calculator to estimate your potential relief.

More information on nurseries here.

More information for the retail, hospitality and leisure industries here.

Financial help if your business has been interrupted by the outbreak

While a small number of businesses are able to continue operating in a way that resembles the norm, most aren’t. Through one government scheme, small and medium-sized businesses affected by the coronavirus can access finance up to £5 million in the form of loans, overdrafts, invoice finance and asset finance.

Businesses with a turnover of up to £40 million are eligible as long as they’re UK-based and have a borrowing proposal that would be been deemed viable if not for the pandemic.

Also, a government Business Interruption Payment will cover the first 12 months of interest payments, meaning small businesses will have no upfront costs and lower initial payments for the first year.

More information here.

We’ve done our best to break down each scheme into easy to understand chunks (without making it a super long read) but it’s still a lot of information to take in. At RDG, our mission is to help small businesses grow but right now, we understand that most will settle for staying afloat.

If you need any help figuring out the right schemes for you, then get in touch. You can call us on 0333 200 0714, drop us an email at advice@rdgaccounting.com or fill in the contact form below. We’d be happy to assist where we can.

Outsourcing your payroll

flexible outsourcing payroll services

Let us take care of your payroll so you can look after more important parts of your business.

Having an efficient payroll service is a key part of all successful businesses, and you can relax knowing that your employees are paid correctly, on time and that your business complies with all HMRC regulations and requirements.

Furloughed employees

As part of our payroll service, we will take care of any staff who have been furloughed, meaning another job you don’t have to worry about. We are keeping up to date with the latest government schemes and funding available, so we can make sure clients are getting the financial support they need to survive.

Offering Coronavirus business support and advice

COVID-19 Key Business Summary Sheet

We have put together a COVID-19 Key Business Summary Sheet which covers the key topics that are being asked in the sector and by our clients, to cover what you need to know as an employer, employee or if you are self-employed.

DOWNLOAD HERE

COVID-19 Weekly Updates

You can also signup to receive weekly COVID-19 updates straight in your inbox including latest Government updates and other useful information and resources that we come across.

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