The COVID-19 pandemic has had a huge effect on businesses all over the world, and has been wreaking havoc on the global economy for more than a year.
We initially wrote a blog about the help and support available for struggling businesses last summer. Since then, however, we’ve had a second lockdown, the implementation of a tier system and now the third national lockdown.
The situation is still changing by the day, and as a result, it can be pretty confusing to know exactly what business support from the government remains available for companies who are still facing difficulty as a result of the pandemic.
So, if you are unsure about business support from the government and the help and support measures currently available, including the introduction of new schemes and the extension of existing ones, we’ve put all of the information together for you in this blog...
7 support options for businesses struggling due to the COVID-19 pandemic:
1. Coronavirus Job Retention Scheme
Originally introduced in March 2020, the Coronavirus Job Retention Scheme has now been extended until the end of April 2021.
The scheme is available to companies of all sizes, and will see the government covering 80% of the wages of furloughed staff up to a limit of £2,500 a month, with employers able to top up this amount if they choose.
This is optional, however, and currently employers are only being asked to cover NICs and pension contributions.
The government has also announced the introduction of additional grants in order for businesses to survive the third lockdown.
These grants include £4,000 for businesses with a rateable value of £15k or under, £6,000 for businesses with a rateable value between £15k and £51k and £9,000 for businesses with a rateable value of over £51k.
In addition, businesses in the retail, hospitality and leisure sectors are also set to receive up to £9,000 in one-off grants.
A further £594 million is also being made available for Local Authorities and the Devolved Administrations to support any businesses which are not eligible for the grants but might still be affected by the lockdown restrictions.
3. Self-Employed Income Support Scheme
As with the Job Retention Scheme, the Self-Employed Income Support Scheme has also been extended until April 2021.
The government is currently providing the third instalment of the SEISS grants, covering 80% of trading profits between November 2020 and January 2021. Applications for a fourth grant, due to cover February to April 2021, will likely open soon.
An extension to the VAT cut (now at 5%) for the hospitality and tourism industry is now in place until the end of March 2021.
In addition, businesses who deferred VAT due from 20th March to 30th June 2020 will now also have the option to pay over the course of 11 payments until the end of March 2022 as part of an opt-in scheme.
5. Time to Pay
The Time to Pay scheme has been extended to help provide companies who are struggling to settle their tax bills with additional breathing space.
The TTP scheme includes VAT, PAYE and Corporation Tax, and it is hoped that by giving companies a payment plan, they will be able to free up cash flow and keep money moving around the supply chain.
6. Loan extensions
Bounce Back Loans and Coronavirus Business Interruption Loans were introduced last year in order to help business stay afloat by accessing emergency cash.
The Bounce Back Loan Scheme was designed for small businesses, allowing them to borrow up to 25% of turnover up to a limit of £50,000, whilst the Coronavirus Business Interruption Loan Scheme had a maximum loan amount of £5 million.
Due to the current lockdown, applications for both of these loans have now been extended until the end of March 2021.
What’s more, loan deadlines have also been pushed back as part of the Pay As You Grow scheme in order to allow more flexibility for businesses.
Under the Pay As You Grow scheme, bounce back loans can be extended from six to 10 years to lower monthly repayments, and struggling companies can make interest-only payments up to three times for a six-month period throughout the duration of the loan.
Once six months’ worth of repayments have been made, businesses can also apply to suspend repayments and take a payment holiday for up to six months to take the pressure off.
7. The Future Fund
Aimed at companies who typically rely on funding from outside investors, the Future Fund is an investor-led scheme providing convertible loans from £125,000 up to £5 million.
The government promises to match 100% of funding introduced into a company from private investors, with the loan maturing after 36 months - at which point it will convert into shares. Applications for the Future Fund were open until 31st January 2021.
Need additional help and advice?
If you are currently facing financial difficulty as a result of coronavirus, don’t suffer in silence.
In addition to the business support from the government outlined above, there are other options available to prevent businesses from closing and help you turn things around, such as an informal agreement, a company voluntary arrangement, or even a pre-pack administration.
The sooner you seek help, the more options you will have available, so contact our friendly and approachable team today to start planning your next steps.