Last week, the Chancellor, Richi Sunak, announced in his budget the financial help that would be provided to businesses following the crisis due to the COVID-19 pandemic. Here is a detail of the financial help planned to be provided by the government for struggling businesses.
Restart grant scheme : a new grant to help businesses reopen. Non-essential businesses can claim up to £6,000 per premises. Hospitality, leisure, pubs, hotels, personal care and gym can claim up to £18,000 depending on ratable value. To be eligible for the grant you need to be based in England and occupy a property on which you pay businesses rates and also you need to be unable to provide your usual in person service from your premises. You are eligible if you have to shut up your business because of the national lockdown from 5 January 2021 or between 5 November and 2 December 2020. The grants start in April 2021 and are available up to June 2021 and you can apply for it on your local council’s website.
Recovery loan scheme : a new loan scheme to ensure that businesses continue to have access to financial help during the crisis due to the pandemic once the existing COVID-19 loan scheme closes. The loans and overdrafts will be available between £25,001 and £10 million per business. The finance can be used for any legitimate business purpose, such as growth and investment. The scheme is open from the 6 April to 31 December. To be able to apply for a loan your business needs to be trading in the UK. You need to show to HMRC that your business is viable if there wasn’t a pandemic and how it has been affected by the crisis. All sectors will be eligible to apply except banks, building societies, insurers, reinsurers, public sector bodies and state-funded primary and secondary schools.
Self-employed grants : two further payment will be available for self employed people who are struggling to work in the context of the pandemic. The first payment covers a three-month period from February until the end of April. It is worth up to 80% of trading profits averaged over three months, up to £7,500 in total. The second grant covers from May to the end of September. The amount available depends on loss of income. For those whose turnover has fallen by at least 30% can apply for a grant of up to 80% of profits, up to a value of £7,500. But if your income has fallen by less than that you can apply for up to 30% of trading capped at £2,850. You can make your claim for the next grant next month. Those who completed their 2019/20 tax return by 2nd March 2021 will be able to apply for these payments, in a change from the previous cut off date of 23rd April 2020.
The VAT deferral new payment scheme : a new payment scheme to help businesses who deferred VAT payments between March and June last year. They will be able to pay what they owe in smaller, monthly installments from March, interest free. The scheme is open between 23 February and 21 June 2021. Depending on when you join you can make 2-11 monthly payments, but the later you join the fewer installments are available to you.
The Coronavirus Job Retention Scheme : the government has confirmed the continuation of the scheme until the end of September 2021. Employees will continue to receive 80% of their salary, up to a maximum of £2,500 payed by the government. Employers will also continue to pay National insurance and pension contributions but will also have to contribute towards the employee’s furloughed salaries with 10% in July, 20% in August and September. All employees who have been on their employer’s payroll on or before 30 October 2020 can qualify for the CJRS for periods ending on or before 30 April 2021. When claiming for periods from 1 May 2021, eligible employees must have been employed on 2 March 2021 and had made a Real Time Information submission to HMRC.