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Covid-19 Support Hub

Coronavirus: what support is available for small businesses and the self-employed?

12-minute read

Coronavirus: what support is available for small businesses and the self-employed?
Lauren Hellicar

Lauren Hellicar

16 April 2020

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Updated: 1 June 2020 – we’ll update this article with new information as it comes in.

With information on the coronavirus (Covid-19) outbreak constantly changing, it can be hard to figure out what support is available to your small business. To get you started, we’ve pulled together a list of ways you can get financial help to weather the storm until you get back to business as usual.

  • Bounce Back Loan Scheme for small businesses
  • £750 million for innovative small businesses
  • Coronavirus business grants
  • Business rates holiday for tax year 2020-21
  • Business rates holiday for nurseries
  • Protection if you can’t pay your commercial rent
  • Coronavirus Business Interruption Loan Scheme (CBILS)
  • Coronavirus Job Retention Scheme (CJRS) – help to pay furloughed employees’ salaries
  • Full refund on statutory sick pay due to Covid-19
  • Self-Employed Income Support Scheme (SEISS)
  • Income Tax and VAT deferred for the self-employed
  • More time to pay Corporation Tax
  • Time to Pay coronavirus helpline
  • Benefits for self-employed workers during the coronavirus pandemic
  • Employment and Support Allowance (ESA)
  • Relief from paying back loans and credit cards
  • Mortgage payment holidays
  • Rent payment holidays
  • Coronavirus business and self-employed support in Scotland, Wales and Northern Ireland
  • Look after your business’s greatest asset

Bounce Back Loan Scheme for small businesses

The Chancellor is making more financing available to the smallest businesses. This support comes in the form of Bounce Back Loans of between £2,000 and £50,000, which you’ll be able to access within days.

According to gov.uk, the government will give accredited lenders a 100 per cent guarantee for the Bounce Back Loans they pay out. The government is also picking up the bill for any fees and interest for the first year, and small business owners won’t need to repay anything towards their Bounce Back Loan in the first 12 months.

After the first year, borrowers will have to pay “2.5 per cent interest for the remaining period of the loan”, according to the government website.

The loans are available for six years to UK-based businesses set up before 1 March 2020. Your business needs to have been adversely affected by coronavirus to qualify.

How do I get this support?

There are currently 11 lenders taking part in the scheme – you can apply for a Bounce Back Loan on the government website.

Read more about the Bounce Back Loan Scheme.

If you're thinking of applying for a Bounce Back Loan, our partners at Swoop may be able to help. Swoop can help simplify and speed-up the loan application process. Visit Swoop’s website and enter a few key details about your business to get started.

£750 million for innovative small businesses

Small to medium-sized enterprises (SMEs) focused on research and development will have access to £750 million of grants and loans, according to the Treasury. That’s in addition to the Future Fund – £500 million of loans being set aside for high-growth firms.

Rishi Sunak, Chancellor of the Exchequer, said: “Britain is a global leader when it comes to innovation. Our start-ups and businesses driving research and development are one of our great economic strengths, and will help power our growth out of the coronavirus crisis.”

How do I get this support?

The funding will be available through national innovation agency Innovate UK and its grants and loan scheme. If you’re one of the agency’s existing 2,500 customers, you’ll be able to opt in to a scheme fast-tracking up to £200 million of grant and loan payments. On top of this, £550 million of extra support is being made available for existing customers.

If you’re a research and development intensive small business but not an existing Innovate UK customer, you may still benefit from £175,000 of support they’re setting aside for around 1,200 firms.

The first payments are planned for mid-May, and there’s more information on the government website.

Coronavirus business grants

The Chancellor is making £25,000 cash grants available to retail, hospitality and leisure businesses with a rateable value between £15,001 and £51,000.

He's also providing one-off grants of £10,000 to smaller businesses. To qualify for the £10,000 grant your business needs to have a rateable value of £15,000 or less, or you need to already be getting Small Business Rate Relief (SBBR), Rural Rate Relief (RRR) or tapered relief.

On top of this, the government has said it’ll relax planning regulations to allow pubs and restaurants to offer takeaways without a planning application, giving these businesses a way to keep bringing in cash despite being empty.

How do I get this support?

You don’t need to do anything – the government will write to you with more information if you’re eligible.

If you have questions, the government’s advice says to contact your local authority.

If you’re not sure how to get in touch with them, you can find your local authority on the government website.

Read more about grants for small businesses.

Swoop finance finder

We’ve partnered with Swoop to help you find the right funding for your business, including loans, equity and grants. Create an account for free and within minutes you could be matched to a number of finance options, including the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme (BBLS).

Start now

Business rates holiday for tax year 2020-21

The government is temporarily cancelling business rates for all retail, leisure and hospitality businesses, in response to the Covid-19 outbreak. The business rates holiday applies in England for tax year 2020-21 for:

  • shops
  • restaurants, cafés, bars. pubs
  • cinemas, live music venues
  • assembly or leisure properties, like sports clubs, gyms, spas
  • hospitality properties, like hotels, guest houses, self-catering accommodation

How do I get this support?

You don’t need to do anything to get this support – it’ll be applied to your April 2020 Council Tax bill. Your local authority may need to reissue your bill to remove the business rate charge. They’ll do this automatically, as soon as possible.

You can use the government’s business rates calculator to find out the amount you’ll no longer have to pay this year.

Read more about business rates.

Business rates holiday for nurseries

Nurseries in England will also get a year off paying business rates for tax year 2020-21.

To be eligible, the building needs to be occupied by providers on Ofsted’s Early Years Register, and completely or mainly used to provide the Early Years Foundation Stage (care and education for children up to age 5).

How do I get this support?

Like retail, leisure and hospitality businesses mentioned above, you don’t need to do anything to get this business rates holiday if you’re eligible. Your local council will automatically apply the discount if you’re eligible.

Protection if you can’t pay your commercial rent

The government announced that commercial tenants who can’t pay their rent as a result of the Covid-19 outbreak will be protected from eviction. This means you won’t be forced out of your business premises if you miss a rent payment up until 30 June – this period may be extended by the government.

How do I get this support?

Commercial tenants and landlords are being encouraged to come to voluntary arrangements on repayment.

Gov.uk makes it clear that this is protection from eviction if you can’t pay your commercial rent right now, because of the pandemic. It’s not a rent holiday, and commercial tenants will still be liable for the rent.

Coronavirus Business Interruption Loan Scheme (CBILS)

Under a new coronavirus business loan scheme, if you have a turnover of up to £45 million you can apply for loans, overdrafts, invoice finance and asset finance of up to £5 million for up to 6 years. The government will encourage lenders to part with their cash by guaranteeing up to 80 per cent of any losses, and there will be no upfront loan charges. On top of this, the government will cover the first 12 months of interest payments.

The government has extended the CBILS to all viable small businesses affected by the pandemic – not just businesses that can't get regular commercial financing. It has also banned lenders from requiring you to use your own property or savings to guarantee a loan under £250,000.

Besides making operational changes to speed up lending approvals, the Chancellor, along with the Governor of the Bank of England, Andrew Bailey, has written to banks 'asking them to support small and medium-sized enterprises in any way they can'. This support includes making sure interest rates are reasonable, and making sure the benefit of the government guarantee to those borrowing under the CBILS is passed on.

How do I get this support?

The scheme, delivered through the British Business Bank, is now available through participating lenders.

Your business needs to:

  • be based in the UK
  • have an annual turnover of up to £45 million
  • have a borrowing proposal the lender would consider viable, if it wasn’t for coronavirus
  • have been adversely impacted by coronavirus (you can self-certify for this)

All major banks will offer this scheme, according to the government website. It advises speaking to your own business banking provider now, to ensure you get any cash you’re eligible for as quickly as possible.

Read more about the Coronavirus Business Interruption Loan Scheme.

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Coronavirus Job Retention Scheme (CJRS) – help to pay furloughed employees’ salaries

If you have staff, including apprentices, you’d otherwise have to lay off due to the Covid-19 outbreak, the Coronavirus Job Retention Scheme will pay 80 per cent of an employee’s salary, up to a maximum of £2,500 a month.

This support will be backdated to 1 March, and is available until October 2020. However, businesses who take part in the scheme will be expected to contribute from August onwards.

How do I get this support?

  • Identify your employees as ‘furloughed workers’, which means staff who have to take unpaid leave
  • Tell the affected employees they’re now ‘furloughed workers’
  • Work out how much you need to claim for using the government calculator

Once you know how much you need to claim for, you can apply through the Coronavirus Job Retention Scheme (CJRS).

You’ll find full details of how to claim under the CJRS on gov.uk.

If you need cash flow support now, you may be eligible for a Coronavirus Business Interruption Loan, mentioned above.

Read more about furloughing employees under the Coronavirus Job Retention Scheme.

Full refund on statutory sick pay due to Covid-19

SMEs with fewer than 250 employees as of 28 February 2020 will get a full refund from the government on 14 days of statutory sick pay per employee off sick with Covid-19. Any sickness you claim for needs to have started on or after 13 March 2020.

How do I get this support?

You don’t need a doctor’s note from your employee, but they do have to either:

  • have had coronavirus
  • be unable to work because they’re self-isolating
  • or be shielding in line with public health guidance

The online repayment system for coronavirus-related SSP is now available on the government website.

Make sure you keep records of all absences and statutory sick pay payments due to Covid-19 (this is good practice for your business for any sickness, at any time).

Read more about statutory sick pay.

Self-Employed Income Support Scheme (SEISS)

The Chancellor's Self-Employed Income Support Scheme (SEISS) pays you 80 per cent of your average trading profits over the last three years, or up to £2,500 a month. Members of partnerships are also eligible for this support.

For the purposes of SEISS, your average trading profit will be your total trading profits or losses for tax years 2016-17 + 2017-18 + 2018-19 divided by three.

You’ll need to take in trading profits of no more than £50,000, and make more than half of your income from being self-employed, to be eligible for the taxable grant.

While you’ll still owe Income Tax and National Insurance on any money you get through the SEISS, it’s a grant rather than a loan. This means you won’t need to pay it back.

On 29 May Rishi Sunak announced an extension to the scheme. If you were eligible for the first payment, you'll be able to claim for a second and final SEISS payment. The second payment will be 70 per cent of three months' average monthly trading profits, capped at £6,570.

How do I get this support?

You’ll need to have a tax return for 2018-19. If you haven’t yet filed yours, you have until 23 April 2020 to do so.

Other eligibility criteria include:

  • you traded in tax year 2019-20
  • you’re trading when you apply, or you would be if the pandemic hadn’t stopped you
  • you plan to keep trading in tax year 2020-21
  • you’ve lost trading profits because of coronavirus

The government website says HMRC will contact you directly by mid-May if you’re eligible, and payments will be made in early June. Once they contact you, you’ll need to fill in a simple online form and the money will be paid directly into your bank account.

Gov.uk says the government will update its guidance when the system is ready for you to claim for the second SEISS payment.

If you’re struggling now, you can claim for Universal Credit (more below), which you should record as part of your income from self-employment. You may also consider applying for the Coronavirus Business Interruption Loan Scheme (more below), which is being made available to most, according to the Treasury.

Read more about the Self-employed Income Support Scheme.

Income Tax and VAT deferred for the self-employed

Anyone due to make their second payment on account in July 2020 and who is struggling to pay because of the pandemic, won’t need to pay their Self Assessment Income Tax bill until January 2021. If you’re able to, you can still make your second payment on account.

You get more time to pay if you’re VAT-registered, too. VAT payments due between 20 March and 30 June 2020 can be deferred until 31 March 2021, but you can still pay before then if you choose to. You'll need to make VAT payments due after 30 June as normal.

How do I get this support?

You don’t need to do anything to get the Income Tax deferral – it’ll be applied automatically to all UK businesses. You’ll have until the end of the 2020-21 tax year to pay any Income Tax liability you accumulate.

The deferred VAT payment deadline will be applied automatically, but you still need to submit your returns. If you’re due a VAT refund during this period, the government will pay it as usual.

Visit our Self Assessment and tax resource for guides on self-employed and small business taxes.

More time to pay Corporation Tax

As of 25 March 2020, if your business is registered with Companies House, you can apply for a three-month extension to the deadline for filing your accounts. Businesses granted this extension won’t get the usual late payment penalty.

How do I get this support?

You need to apply for the extension using the fast-tracked application system. It takes 15 minutes, and any business giving Covid-19 (coronavirus) as the reason will get an automatic and immediate extension, according to the government website.

Read more about Corporation Tax.

Time to Pay coronavirus helpline

HMRC’s Time to Pay service is available for all businesses with outstanding tax bills and who are in financial distress. If coronavirus has caused you difficulty with paying your tax bill that won’t be solved by the tax deferrals mentioned above, you can try the special coronavirus helpline.

How do I get this support?

You can call the dedicated HMRC helpline on 0800 024 1222, but be aware it may take longer than usual to speak to an adviser. Decisions about any extra time you get to pay your bill will be made on a case-by-case basis.

Benefits for self-employed workers during the coronavirus pandemic

If you’re not eligible for Statutory Sick Pay because you’re self-employed or earn below the Lower Earnings Limit of £118 a week, the government is making it easier to claim for Universal Credit or Contributory Employment and Support Allowance during the Covid-19 outbreak.

Universal Credit (UC)

You’ll be able to claim Universal Credit and get advance payments upfront with no need to go to a Jobcentre, if your work has reduced or stopped because of coronavirus.

How do I get this support?

Any payments you get will be based on your actual earnings, and you’ll need to declare any self-employed earnings and expenses at the end of each monthly assessment period.

The Treasury said, “self-employed people can now access Universal Credit in full.

“A self-employed person with a non-working partner and two children, living in the social rented sector, can receive welfare support of around £1,800 per month.”

The government website has details on eligibility and how to claim Universal Credit.

Read more about benefits for self-employed people.

Employment and Support Allowance (ESA)

ESA is for people with a disability or health condition that affects how much they can work. During the coronavirus pandemic, you can apply for ‘new style’ ESA if you can’t get Statutory Sick Pay and you or your child are ill or self-isolating because of coronavirus.

Once you’ve been assessed, you’ll be placed into one of two groups. The amount you’ll get depends on whether you can get back into work:

  • up to £74.35 a week if you’re able to get back into work
  • up to £113.55 a week if you’re unable to get back into work

How do I get this support?

The government website has details on eligibility and how to claim ESA.

Relief from paying back loans and credit cards

The Financial Conduct Authority (FCA) has asked lenders to use flexibility built into their rules to support customers during the coronavirus outbreak, taking into account individual circumstances.

If you’re given a payment holiday, your lender should record it in a way that doesn’t impact your credit score.

How do I get this support?

Lots of the major lenders have already made statements on this, so it’s worth speaking to yours if you’re now having difficulty keeping up with personal loan or credit card repayments.

Mortgage payment holidays

If you own your own home, there’s good news from mortgage lenders. They’ve agreed to offer payment holidays to customers in financial difficulty due to the Covid-19 outbreak. This could mean you don’t have to pay anything towards your mortgage for up to three months.

How do I get this support?

Speak to your mortgage provider to find out what support they can offer you. This may depend on whether you were already in arrears when you applied for the payment holiday.

Rent payment holidays

Similarly, mortgage payment holidays for landlords bring good news for tenants. Along with residential mortgage customers, buy-to-let landlords are now eligible for the three-month payment holiday from their mortgage.

That’s on top of the three-month notice period landlords must give tenants when starting any new repossession proceedings.

These measures recognise the fact that tenants may struggle to keep up with rent payments if their income is affected during the pandemic. However, tenants are still expected to pay the rent in the future.

How do I get this support?

The government advises landlords and tenants to work together to come up with an affordable rent repayment plan. Tenants’ individual circumstances are to be taken into account when creating the plan.

Coronavirus business and self-employed support in Scotland, Wales and Northern Ireland

Some of the support measures available to help small businesses through the pandemic are administered by the devolved governments. You can find out more about small business support measures specific to the devolved nations on gov.uk.

  • Scotland
  • Wales
  • Northern Ireland

Look after your business’s greatest asset

If you’re self-employed, you are your business’s most valuable asset – so look after yourself. The Mental Health Foundation offers useful advice on looking after your mental health during the coronavirus outbreak. Equally, if you’re a small business owner with employees, you can share these tips with your staff.

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