Covid-19 continues to impact thousands of UK businesses. Regardless of whether your company was struggling beforehand, the Government’s coronavirus support packages have been crucial in helping those affected by the pandemic.
Below are details of the support in place for UK businesses during the coronavirus pandemic:
The self-employment income support scheme
Introduced in June 2020, the Self-Employment Income Support Scheme (SEISS) grants up to £2,500 a month to self-employed workers based on business earnings.
The Chancellor has since announced a SEISS Grant Extension, which will provide critical support to the self-employed in the form of two grants.
Each of these is available for three-month periods covering November 2020 to January 2021 and February 2021 to April 2021.
If you are self-employed, to be eligible for the Grant Extension, you must:
• have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
• declare that they intend to continue to trade and either:
- Be currently actively trading but be impacted by reduced demand due to coronavirus.
- They have previously been trading but are now temporarily unable to do so due to coronavirus.
The Coronavirus Job Retention Scheme (CJRS)
The Coronavirus Job Retention Scheme (CJRS) is better known as the furlough scheme. It allows furloughed workers to receive 80 percent of their wage for all employment costs up to a cap of £2,500 per calendar month, including tax, NICs, and pension.
Once an employee has been designated as furloughed and it has been agreed between relevant parties, the employer then must inform Her Majesty’s Revenue and Customs (HMRC).
November 30 is the last day you can submit claims for periods ending on or before October 31, 2020. After this date, you will not be able to submit further claims or add to existing ones.
There is also a Job Retention Bonus, which can be claimed from February 15, 2021. This is a £1,000 one-off taxable payment to you, the employer, for each eligible employee that you furloughed and kept continuously employed until January 31, 2021.
You can claim the bonus between February 15 and March 31, 2021, and you do not have to pay this money to your employee.
The Job Support Scheme (JJS)
The Job Support Scheme (JSS) replaces the furlough scheme, which ends in November 2020.
Under the revised plan, employers will pay less, and staff can work fewer hours before they qualify for the scheme.
Instead of a minimum requirement of paying 55% of wages for a third of hours – as announced by the Chancellor in September during the launch of the Winter Economic Plan – employers will have to pay for a minimum of 20% of usual hours worked and 5% of hours not worked.
The Government has announced that it will now fund 62% of the wages for hours not worked, which more than doubles the maximum payment to £1,541.75 a month.
The Bounce Back Loan Scheme (BBLS)
The Bounce Back Loan Scheme (BBLS) enables smaller companies to access finance during the coronavirus pandemic quickly.
It helps small- and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover up to a maximum loan of £50,000.
The Government guarantees 100% of the loan, and there are no fees or interest to pay for the first year. However, after 12 months, the interest rate will be 2.5% per year.
The loan length is six years, but you can repay early without incurring a fee.
You can apply for a BBLS loan if your business:
• is based in the UK.
• was established before March 1, 2020.
• has been adversely impacted by Covid-19.
The BBLS officially closes at the end of November 2020.
Note – You might also be interested in this post looking at how to dissolve a limited company with a bounce-back loan.
The Coronavirus Business Interruption Loan Scheme (CBILS)
The Coronavirus Business Interruption Loan Scheme (CBILS) provides financial support to smaller businesses affected by Covid-19.
It helps small- and medium-sized businesses access loans and other kinds of finance up to £5 million.
The Government guarantees 80% of the finance to the lender. It will also pay interest and any fees for the first 12 months.
You can apply for a CBILS loan if your business:
• is UK-based.
• has an annual turnover of up to £45 million.
You need to show that your business:
• would be viable were it not for the pandemic.
• has been adversely impacted by coronavirus.
If you want to borrow £30,000 or more, you also need to confirm that your business wasn’t classed as a business in difficulty on December 31, 2019.
The definition of an ‘undertaking in difficulty’ includes businesses that have accumulated losses greater than half of their share capital.
The CBILS officially closes at the end of November 2020.
The Kickstart Scheme
The Government’s Kickstart Scheme provides funding to employers to create job placements for 16- to 24-year-olds on Universal Credit.
It is an excellent way for businesses to not only take on additional support while being paid to do it, but it also gives young people a step up into employment.
Businesses not only get paid £1,500 per placement, but they also get the wages, NI, and pension contributions paid at National Minimum Wage rates for up to 25 hours per week for people aged 24 and under.
A Kickstart Scheme application must be for a minimum of 30 job placements. If a single employer cannot provide 30 placements, a Kickstart gateway – such as a local authority, charity, or trade body – can help them apply.
Employers can spread the start date of the job placements until the end of December 2021.
