Covid-19: what support is still available for businesses?
Although coronavirus restrictions have eased across much of the UK, many businesses are still feeling the impact of the pandemic. Here's a rundown of the government schemes that are still available for businesses and self-employed people in need of support.
Self Employment Income Support Scheme
The fifth and final grant of the Self Employment Income Support Scheme (SEISS) is available to eligible self-employed business owners from late July 2021.
The fifth grant covers the period from 1st May to 30th September 2021. Businesses whose turnover fell by 30% or more between April 2020 and April 2021 as a result of the coronavirus crisis will receive 80% of three months’ worth of their usual average trading profits. This grant payment is taxable and is capped at £7,500 in total.
Businesses whose turnover fell by less than 30% over the same period as a result of the coronavirus crisis will receive 30% of three months’ worth of their usual average trading profits. This grant payment is also taxable and is capped at £2,850 in total.
You can find more information about how and when to make a claim for the fifth SEISS grant on HMRC’s website.
Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme (CJRS), commonly referred to as the ‘furlough’ scheme, will remain in place until the end of September 2021.
For July 2021, employers can reclaim 70% of furloughed employees’ wages from the government, up to a maximum of £2,187.50 per employee per month. For August and September, this will drop to 60%, up to a maximum of £1,875 per employee per month.
If you need to use the scheme, our furlough calculator can help you work out how much you can claim for each furloughed employee. You can also find more information about the Coronavirus Job Retention Scheme on the government’s website.
Recovery Loan Scheme
Most businesses that trade in the UK and have been affected by coronavirus can apply for a loan under the Recovery Loan Scheme. The scheme will remain open until 31st December 2021.
Under the scheme, businesses can apply for a loan from an accredited lender, with the government guaranteeing the lender up to 80% of the money borrowed. The business applying for the loan remains 100% liable for the debt.
Under the Recovery Loan Scheme, businesses can apply for:
- a loan or overdraft of between £25,001 and £10 million per business
- invoice finance or asset finance of between £1,000 and £10 million per business
For loans and asset finance, the loan term can be up to six years and for overdrafts and invoice finance the loan term can be up to three years. However, all decisions are at the discretion of the lender.
You can apply for a loan through the Recovery Loan Scheme if your business is based in the UK and:
- has been negatively affected by coronavirus, and
- was not ‘an undertaking in difficulty’ on 31st December 2019
You can find more information about the Recovery Loan Scheme on the British Business Bank’s website.
To learn more about what support is available for your business and to stay up to date with the latest news, take a look at our small business coronavirus hub.
Disclaimer: The content included in this blog post is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this blog post. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.