Covid-19 Funding Summary
The uncertainty of Covid-19 has brought a significant number of challenges to all sizes of business and the main government response has come in the form of providing a variety of different employment schemes, loans, and tax relief.
So are you getting the funding that your business is entitled to in order to help you survive the biggest economic challenge this country is facing since World War Two? If you’ve got an annual turnover of less than £45m, you could qualify for some or all of the following schemes. Each scheme has its own eligibility criteria, so make sure you check this via the links provided before making a claim or by using the HMRC digital assistant.
1. Employment Schemes
a) Kickstart Scheme
The Kickstart Scheme has been launched to create a number of new 6-month job placements for young people who are currently on Universal Credit and at risk of long-term unemployment.
With increasing numbers of recent graduates, college and school leavers struggling to find employment due to the pandemic, this is a fantastic opportunity to support both young people and businesses.
Funding is available for 100% of the relevant National Minimum Wage for 25 hours a week, plus associated employer National Insurance contributions and employer minimum automatic enrolment contributions. There is also a grant of £1,500 per job placement available for setup costs, support and training.
If you are creating less than 30 placements, you can only apply for the scheme through a Kickstart Gateway, and you must be able to demonstrate that the roles are genuine new jobs. You also need to provide soft skills and employability training for the participants.
b) Job Support Scheme
The Job Support Scheme opens on 1st November 2020 and replaces the Coronavirus Job Retention Scheme which ends on the 31st of October 2020. It is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce and runs for 6 months.
You are required to continue to pay your employee in full for time worked, but the cost of hours not worked will be split between you, the Government (through wage support) and the employee (through a wage reduction), For hours not worked, you will only have to pay 5% of the employee’s wages, while the government’s contribution will be 62% up to a capped limit of £1,541.75 per month (or £2,100 per month for businesses forced to close). The minimum number of hours employees need to work to be eligible is 20% of their normal hours.
In addition, you will be able to claim the Job Retention Bonus (see below). For further information, visit the Job Support Scheme government pages.
c) Job Retention Bonus
Following the closure of the Job Retention Scheme as of the 31st October 2020, the government have now put in place a Job Retention Bonus scheme. This provides a £1,000 one-off taxable payment to you for each eligible employee that you furloughed and kept continuously employed until the 31st January 2020.
You’ll be able to claim the bonus between the 15th February 2021 and the 31st March 2021 via on online claim service on the gov.uk website which will be updated by the end of January. You do not have to pay this money to your employee.
For further information, visit the Job Retention Bonus government pages.
d) Coronavirus Statutory Sick Pay
The Coronavirus Statutory Sick Pay Rebate Scheme will repay employers up to 2 weeks of Statutory Sick Pay paid to current or former employees who have either been off sick or have to self-isolate. You must have had a payroll scheme that was created and started on or before the 28th February 2020 as well as having fewer than 250 employees on the 28th February 2020 across all your PAYE payroll schemes.
For further information, visit the Coronavirus Statutory Sick Pay Rebate Scheme government pages.
Local Restrictions Support Grant
The Local Restrictions Support Grant (LRSG) supports businesses that were open as usual, providing services in person to customers from their business premises, but which were then required to close for at least 3 weeks due to local lockdown restrictions imposed by government. Depending on your rateable value, you could be eligible for a grant of up to £1,500 per 3 week closure period.
For more information, visit the Local Restrictions Support Grant government pages.
a) Business Interruption Loan
This scheme helps small and medium-sized (under £45m turnover) UK based businesses to access loans and other kinds of finance up to £5 million. The government will guarantee 80% of the finance to the lender and pays interest and any fees for the first 12 months. There are over 50 lenders participating in the scheme.
You will need to show that your business would be viable were it not for the pandemic, and how it has been adversely impacted by coronavirus. The maximum length of the facility depends on the type of finance you apply for. It will be up to 3 years for overdrafts and invoice finance facilities, or up to 6 years for loans and asset finance facilities.
You’ll also need to provide documents that show you can afford to repay the loan e.g. management accounts, cash flow forecast, business plan etc.. The lender will decide whether to offer you a loan or another type of finance and you’ll be responsible for repaying 100% of the amount borrowed.
For more information, visit the Business Interruption Loan Scheme government pages.
b) Bounce Back Loan
This scheme helps small and medium-sized UK based businesses to borrow between £2,000 and up to 25% of their turnover or £50,000 (whichever is the lower). There are 11 lenders participating in the scheme including many of the main retail banks. You should approach a suitable lender yourself
via the lender’s website where they will ask you to complete a short online application form and self-declare that you are eligible.
The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months with an interest rate of 2.5% a year after the first 12 months. Your business must have been established before the 1st March 2020 and must be adversely impacted by coronavirus.
The length of the loan is 6 years, but you can repay early without penalties. No repayments will be due during the first 12 months. The lender will decide whether to offer you a loan or another type of finance and you’ll be responsible for repaying 100% of the amount borrowed.
For further information, visit the Bounce Back Loan Scheme government pages.
4. Tax Relief
a) Business Rates Relief
Businesses in the retail, hospitality and leisure sectors in England will not have to pay business rates for the 2020 to 2021 tax year. You’re eligible if your property is a:
- restaurant, café, bar or pub
- cinema or live music venue
- assembly or leisure property – for example, a sports club, a gym or a spa
- hospitality property – for example, a hotel, a guest house or self-catering accommodation
You do not need to take any action as your local council will apply the discount automatically.
For further information, visit the Business Rates Relief government pages.
b) VAT and Self-Assessment Deferral
There are deferral options available for both VAT and self-assessment tax bills enabling businesses that are struggling due to coronavirus to extend payment periods and amounts.
The VAT deferral scheme is now closed but the government has agreed to extend the payment periods and allow smaller amounts for those already within the scheme.