Lockdown 2.0 is taking hold and for many who weathered the storm of the first lockdown over the summer, it looks set to be a particularly long winter.
The small business support provided by the government is quite comprehensive but does not capture all nuances of business set up, particularly those that have set up more recently. In this blog I shall look at a summary of the main options available to the small business owner and some other ways you may be able to access help.
Self Employed Income Support Scheme (SEISS)
- The SEISS has been extended to 30 April 2021.
- The extension will provide two grants and will last for six months, from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a three-month period. The online portal for the for the next grant will be available to access from 30 November 2020.
- As with the previous grants you must be actively trading and intending to continue trading to be eligible for the scheme, if your trade has now ceased you can no longer claim.
- For the first 3 months, you will get a lump sum covering 80% of three months’ worth of average monthly profits up to a total of £7,500. The % for the next payment is yet to be announced.
- Tip from Lual – now there has been sufficient time for 2019/2020 tax returns to be filed the eligibility for grant 4 may broaden to include those businesses that started in that year.
- Only those who were eligible for the previous two SEISS grants can apply, however there is one important change to the eligibility criteria for the third grant.
- You will need to declare that your business has been affected since 1st November 2020 by reduced demand due to COVID-19 in order to claim. With the previous two grants, you only had to declare that your business has been “adversely affected”, which in addition to a reduction in trade could also have covered extra PPE costs or if you were shielding/self-isolating.
Business Interruption Loans
- The scheme helps small and medium-sized businesses to access loans and other kinds of finance up to £5 million.
- The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months. Over 50 lenders participating in the scheme.
- The scheme is open until 31 January 2021.
Bounce Back Loans
- The scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000.
- The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year. No penalty incurred if paid back in first 12 months.
- The scheme is open to applications until 31 January 2021.
Pay as You Grown Scheme
- The government will give all businesses that borrowed under the Bounce Back Loan Scheme the option to repay their loan over a period of up to ten years. This will reduce their average monthly repayments on the loan by almost half.
- Businesses who deferred VAT due from 20 March to 30 June 2020 will now have the option to pay over the course of 11 payments up until the end of March 2022.
- This scheme will require you to opt-in, details on how to are yet to be published.
Enhanced Time to Pay for Self-Assessment taxpayers
- The government will give the self-employed and other taxpayers more time to pay taxes due in January 2021, building on the Self-Assessment deferral provided in July 2020.
- Taxpayers with up to £30,000 of Self-Assessment liabilities due will be able to use HMRC’s self-service Time to Pay facility to secure a plan to pay over an additional 12 months. This means that Self-Assessment liabilities due in July 2020 will not need to be paid in full until January 2022.
- Any Self-Assessment taxpayer not able to pay their tax bill on time, including those who cannot use the online service, can continue to use HMRC’s Time to Pay Self-Assessment helpline to agree a payment plan.
- Tip from Lual – Don’t just accept payment on account estimates next year, as they will be based on pre-COVID-19 filed returns and therefore may be too high, if your earnings have been heavily impacted by COVID-19.
Limited Company Filings
- Annual Accounts company’s filing deadline if it falls any time from 27 June 2020 to 5 April 2021 (including these dates).
- Deadline extended from 9 to 12 months.
- If you’ve already changed your date, need to check specifics for you.
- Confirmation Statement filing timeline also extended.
Other Support to Consider
There are many organisations that you may be able to reach out, here are a few examples:
- Trade Bodies – If your trade has a governing body there may be additional support at this time. Some organisations even provide hardship funds for members.
- WENTA – Hertfordshire based organisation providing business advice, grants and facilities to growing businesses.
- Enterprise Networks – Such as the Herts Growth Hub support business through grants and other business advice.
- Town Centre Management – Organisations like Hitchin BID provide support to specific areas.
- Enterprise Nation and Be The Business both provide business support and a community for small businesses to gather.
- BT Small Business Support Scheme – Many larger corporates are offering their expertise to support growing business and discounts on their products.
- Prince’s Trust – The Trust provides business support to those under 30.
This should give you a flavour of some of the help that is out there for your business. If you would like to discuss further the options for your business, including how to structure your business for recovery or free up cash to weather the storm, do get in touch on firstname.lastname@example.org or book here for a free 20 minute discovery call.