The British government has announced a series of measures to mitigate the effect of COVID-19 closures and interruption on small and medium sized businesses. It can be hard to wade through all the announcements to find what’s relevant to you, so we’ve done all the legwork for you. 

For small businesses in particular, the package has been very generous. The aim is to come out the other side of this pandemic in a strong position, with a functioning economy and a burgeoning workforce. There are some very helpful and robust packages in place, and we’re certain that the effects of this support will not go unappreciated.

Most recently, Chancellor Rishi Sunak announced measures for the self-employed, which in large part mirror the schemes aimed at businesses. They had previously encountered backlash from self-employed workers for not providing support. The delay in measures was due to the relative complexity and diversity of circumstances within the self-employed community.

Here is a breakdown of the schemes and measures in place. Remember there are other grants and schemes besides what is mentioned here.

For small businesses:

Business Interruption Loan Scheme

Loans of up to £5million will become available to support small and medium-sized businesses, with no interest due for the first six months.

The business loan scheme will be delivered by the British Business Bank. You can access it through your high street bank.

To be eligible for a business interruption loan you must:

• Be based in the UK
• Have an annual turnover of less than £41 million
• Operate within an eligible industrial sector (a small number of industrial sectors are not eligible for support)
• Have a sound borrowing proposal, but have inadequate security to meet a lender’s normal requirements
• Have filed any accounts and tax returns due (even if your tax is not necessarily fully paid)
• Be able to confirm that you have not received other public support of de minimis state aid beyond €200,000 equivalent over the previous three years.

An Employment Support Package

The Treasury has committed to working with business groups to develop an Employment Support Package. It will help to mitigate employment costs for small firms, thereby preventing redundancies. This Coronavirus Job Retention Scheme includes a ‘furloughed workers’ segment, which will pay 80% of an employee’s wages up to a maximum of £2,500 if you ask them to temporarily stop working. This will protect the job market for the duration of the pandemic.

Statutory Sick Pay Refund

If you are a business with fewer than 250 employees (as of 28 February 2020), you can reclaim the cost of any Statutory Sick Pay (SSP) caused by the coronavirus. This is currently up to a limit of 14 days per individual. The government will refund the cost to you. To be eligible, you must keep records of the employee’s absence and SSP payments. The employee will not need to provide a doctor’s note.

Business rates support

If you have a business in the retail, hospitality or leisure sector with a rateable value of less than £51,000 you will be eligible for a £25,000 cash grant from the government. You should contact your local authority for details on how to claim.

Additionally, all retail, leisure and hospitality companies will be exempt from business rates for the 2020/2021 tax year.

Extending Time to Pay arrangements

HMRC have agreed that they will extend Time to Pay arrangements for companies affected by the coronavirus. These arrangements will be negotiated on an individual basis between businesses and the Treasury. This usually means debt collection is suspended if a business cannot afford to pay its tax bill. HMRC have said that, during the coronavirus pandemic, the usual 3.5% annual interest on deferred tax payments will be scrapped.

If you’re self-employed you may also be eligible to receive tax support through HMRC’s Time to Pay service. 

If you have missed a tax payment or you might miss your next payment due to Covid-19, call HMRC’s dedicated helpline on 0800 0159 559.

For the Self Employed: 

Postponement of IR35 rule changes

To support the self-employed and sub-contractor community, the government has delayed the introduction of the IR35 legislation for the private sector. The IR35 rule was due to launch in April 2020, but will now be delayed for 12 months. 

Self-employed tax deferral

Income Tax payments due in July 2020 under the Self-Assessment system may be deferred until January 2021. However, deferment is optional. If you are still able to pay your second payment on account on 31 July 2020 you should do so.

You are eligible if your self-assessment ‘payment on account’ is due to be paid on 31 July. It’s an automatic offer and so you don’t have to apply for a deferral. You won’t pay any penalties or interest for late payment if you decide to defer your payment until 31 January 2021.

Self-Employed Income Support Scheme

The Self-Employment Income Support Scheme covers the same amount of income as for furloughed workers. This scheme will pay a taxable grant to self-employed workers, equivalent to 80% of their average monthly profits over the last three years, up to £2,500 a month. The three months’ income will be paid as one lump sum in June. Workers will have to complete an online form in order to access the grant, which will be paid straight into your bank account. This is expected to be up and running by early June.

Rishi Sunak confirmed that the scheme would be open for at least three months, with the possibility that it will be extended. The Chancellor also confirmed that self-employed workers can also access business interruption loans, for which there have already been 30,000 enquiries.

The grant will apply to any self-employed workers across the UK who:

• Have trading profits of up to £50,000
• Make the majority of their income from self-employment
• Filed a tax return in 2019 and are already self-employed. To help more people access the scheme, the government confirmed that HMRC has extended the tax return deadline for another four weeks to enable self-employed workers to submit a tax return.

If you have fewer than three years trading accounts, HMRC will look at whatever you do have. If you are ‘very recently self-employed’ you are not eligible for the scheme.

Universal Credit

Self-employed workers who have seen a significant reduction in earnings are able to claim Universal Credit, providing you meet the usual eligibility criteria. The wait time has been decreased, so you are able to access advance payments upfront.

The government have temporarily relaxed the requirements of the Minimum Income Floor.