There is some confusion around the help available to the businesses and the self-employed to try and ensure the effects of this global pandemic do not lead to financial ruin.
This blog post is meant to provide some clarification on what’s available to small businesses…
Coronavirus Job Retention Scheme
This is a scheme that all UK employers can access to pay 80% of employees salaries up to a cap of £2,500 per month per employee. In order for any employees to be eligible, you need to ‘furlough’ them. This essentially means that the business is requiring them to take a leave of absence. These are meant to be a temporary measure to help businesses survive during harsh economic times.
Coronavirus Business Interruption Loan Scheme
This is a loan of up to £5 million, where the government pays the first 12 months of interest and will guarantee up to 80% on each loan. The scheme is being delivered through commercial lenders, backed by the British Business Bank.
In order to be eligible the business needs to be UK based with a turnover of no more than £45 million per year. In order to apply you need to contact your lender. They will assess you in the normal way, and if you qualify for a normal loan, you will not be able to access the scheme. Please make sure you read the small print on this carefully.
You will be able to defer your VAT bills. You will still need to complete VAT returns but do not need to pay yet. If you want to make the most of this, make sure you cancel the direct debit to HMRC. I also believe HMRC are being lenient on giving time to pay corporation tax bills. Seek advice from your accountant if this applies to you.
Business Rate Support
For businesses in the retail, hospitality or leisure industries with a rateable value of between £15,000 and £51,000, you will be eligible for a £25,000 cash grant from the government. For these businesses, there will also be a business rates holiday for 2020-21 tax year.
For businesses who receive small business rate relief, you will qualify for a grant of £10,000. Originally these were meant to happen automatically, however, I have heard that they may need to applied for through your local council. Please check your relevant council’s website.
There is a 3 month extension for filing company accounts.
If anything else is announced I will update you when possible.
Stay safe and well everyone.