The economy has really struggled during the Covid-19 pandemic and as businesses have been forced to close it has meant that every cash till has been silenced. What’s more, it’s left businesses wondering whether they are going to be able to open back up once the pandemic passes. 

The government has attempted to do everything possible to save jobs and businesses and this has come in the form of grants and loans. So, what support has been made available?

Coronavirus Job Retention Scheme

This scheme is now available for businesses that have staff that would usually be made redundant because of Covid-19. Therefore, the scheme is designed to pay a portion of the salary of all employees up to £2,500 per month. It was due to end in October but the pandemic continued to gather momentum and so it was extended until March 2021.

Businesses will not be expected to contribute for the hours whereby the employee does not work but businesses will have to pay National Insurance Contributions and Pension Contributions. 

Flexible Furloughing is a possibility too which means that businesses can add to their employee’s wages should they wish to. 

Job Support Scheme for Businesses with Reduced Demand

This was originally designed to come into effect on 1st November but as the second national lockdown started, the launch was postponed. However, it will eventually replace the furlough scheme which is going to end in March 2021. It was going to be in place for six months with the aim to protect viable jobs in those businesses that had experienced a drop in demand as a result of Covid-19.

The scheme works with businesses paying employees for the time they worked and then the cost of the hours they didn’t work being split between the government, the employer and the employee via wage reduction.

Job Support Scheme for Businesses Forced to Close

Once again, as the Job Support Scheme has been postponed, the Furlough Scheme which has been extended can be used here. The Job Support Scheme was aimed at helping businesses that had no other option other than to close down. Therefore, two-thirds of the employee salary would be paid up to £2,100 per month.

Local Restrictions Support Grant for Businesses Forced to Close

The Local Restrictions Support Grant was expanded in October and is designed to assist businesses that were open as normal but were then forced to close for two weeks as a result of local lockdown restrictions. Businesses are expected to be paying business rates on their premises but could be other grants available for those businesses that don’t pay business rates. 

For those small businesses that have properties with a rateable value of less than £15,000, then they will be given £1,334 per month. Medium-sized businesses that have a rateable value of £15,001 to £51,000 will be given £2,000 per month. Larger businesses will have the ability to claim up to £3,000 per month.

Bounce Back Loan Scheme for Small Businesses

This scheme is designed to offer loans that range from £2,000 to £50,000 with the government giving lenders a 100% guarantee for the loans that they give. If there are any fees or interest during the first year then they will be covered by the government and small businesses will not be required to pay anything back during the first 12 months. Once the first year has passed, a 2.5% interest rate will be applied to the loan for the remaining period. 

The loans can be paid over a period of 10 years and a payment holiday of up to six months can be taken although businesses must have made six payments to take advantage of this option. 

£750 Million for Innovative Small Businesses

For small to medium-sized businesses that are based around research and development then they will have access to grants and loans worth £750 million. 

Business Rates Holiday for 2020-21 Tax Year

The government has temporarily cancelled business rates for hospitality, leisure and retail businesses and this includes:

• shops
• restaurants, cafés, bars, pubs
• cinemas, live music venues
• assembly or leisure properties, like sports clubs, gyms, spas
• hospitality properties, like hotels, guest houses, self-catering accommodation

Coronavirus Business Interruption Loan Scheme

This is available for businesses that have a turnover of up to £45 million and that means that they can apply for overdrafts, loans, invoice finance and asset finance of up to £5 million. All money from lenders will be guaranteed up to 80% by the government while it will also pay the first 12 months of interest payments. 

Self-Employment Income Support Scheme

This scheme is made up of several grants with three already released in April 2020, August 2020 and December 2020 with a final grant being paid between February 2021 and April 2021. The grant has paid 80%, 70% and 40% respectively of three months average monthly trading profits and all. This grant is only available to those who earn less than £50,000 and you will need to pay National Insurance and Income Tax on it.

Income Tax and VAT Deferred for the Self Employed

This was announced by the government in 202 that Self-Assessment taxpayers can defer their payments further. Therefore, anyone who needs to pay up to £30,000 in tax by 31st January 2021 can delay that until 31 January 2021.

There is also a VAT deferral scheme whereby businesses that chose to defer VAT payments between March and June 2020 can now make interest free payments over the 2021-22 tax year instead of paying in full by March 2021.

The pandemic has caused a wealth of problems for businesses and the future is still relatively unknown despite a vaccine being available. Therefore, businesses might want to consider their options and whether the financial help that is available can help them to ride the storm and continue trading one the pandemic is over.