Summary of the help announced by Government for small business
- Coronavirus Job Retention Scheme
- Self-employment Income Support Scheme
- deferring VAT and Income Tax payments
- Statutory Sick Pay relief package for small and medium sized businesses (SMEs)
- 12 month business rates holiday for all retail, hospitality, leisure and nursery businesses in England
- small business grant funding of £10,000 for all businesses in receipt of small business rate relief or rural rate relief
- grant funding of £25,000 for retail, hospitality and leisure businesses with proporty that has a rateable value between £15,000 and £51,000
- Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
- HMRC Time to Pay Scheme
Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme is available to all UK employers with a PAYE scheme. It’s objective is to keep people at home while enabling employers to retain staff for the future so they can then begin to rebuild their businesses.
How the scheme will work
- Staff will be furloughed and they must not work for the employer during the period of furlough.
- Furlough is backdated to 1 March 2020 and will last for at least 3 months and will be extended if necessary
- It is available to employees on the payroll at 28 February 2020
- The scheme pays a grant to the employer through a new online system which is being built for this purpose.
- The employer will pay the employee through payroll, using the Real Time Information (RTI) system as usual, as required by contract of employment.
- The Scheme will be administered by HMRC. Relevant Employees must be designated as furloughed employees. Employers will submit information to HMRC through a new online portal.
- Maximum grant will be calculated per employee and is the lower of 80% of wages or £2,500 per month. Wages to include all employment costs up to cap of £2,500, this includes employers’ NIC and pension contributions. Wages will be determined by reference to a defined period yet to be announced.
- Employer can “top up” staff wages to 100% but they are not required to do so. The grant will not cover this “top up” or the associated employers’ NIC and pension contributions.
- Grant is taxable and must be included as income in the business’ calculation of taxable profits.
For further information please see the detailed Government guidance for employers – Claim for wage costs through the Coronavirus Job Retention Scheme
Self-Employment Income Support Scheme
The Self-employment Income Support Scheme (SEISS) has been designed to support self-employed individuals (including members of partnerships) who have lost income due to cornavirus COVID-19.
How the scheme will work
To be eligible for the scheme you must:
- be a self-employed individual or member of a partnership
- have submitted a Self Assessment tax return for the tax year 2018/19
- have traded in the 2019/20 tax year
- be continuing to trade when you apply, or would be except for COVID-19
- intend to continue to trade in the 2020/21 tax year
- have lost trading/partnership trading profits due to COVID-19
- not have trading profits of more than £50,000
- have more than half of income coming from self-employment
The scheme will cover 80% of average profits over the past three years, up to £2,500 per month, for at least 3 months. It will be calculated by reference to the 2016/17, 2017/18 and 2018/19 tax years. HMRC will average total trading profit over these tax years to calculate the amount due.
The grant is taxable and will be payable as a lump sum. Expected payment date is in June 2020.
HMRC will contact those eligible for the scheme and applications will be made via an online portal yet to lauch.
Further information is available on the Government website – Claim a grant through the coronavirus (COVID-19) Self-employment Income Support Scheme
Other help for the Self-Employed:
- deferral of Self Assessment income tax payments due in Jult 2020 and VAT payments due from 20 March 2020 until 30 June 2020
- grants for businesses that pay little or no business rates
- increased amounts of Universal Credit
- Business Interruption Loan Scheme
Grants for businesses who pay little or no business rates
The Small Business Grant Scheme is funding provided to local authorities to support small businesses that occupy business premises that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.
To be eligible to claim a business must:
- be based in England
- occupy business premises
- be in receipt of small business rate relief or rural rate relief as of 11 March 2020
How to access the scheme:
Your local authority will write to you if you are eligible for this grant.
You should contact your local authority for enquiries on eligibility for, or provision of, the grant. Check your local authority’s website for specific information on how your local authority will deliver the scheme.