The financial support available to business owners affected by COVID-19
The spread of COVID-19 has wreaked havoc on businesses everywhere. No matter your industry, size, or location, chances are you’re experiencing the knock-on effects of the virus.
Business owners are making difficult decisions regarding their future. Some have been forced to close temporarily as entire industries shut down. Others have moved to operating remotely for the foreseeable future. And some are just trying to make ends meet and survive through the next few months.
As the virus is affecting every single person in the UK, our government is doing everything it can to minimise the long-lasting impacts on our economy. As a result, there is a range of financial support schemes in place to support businesses through this uncertain time.
Coronavirus Job Retention Scheme
This scheme provides an alternative to laying off staff and making redundancies. It’s available to all UK employers for at least three months, starting from 1st March 2020.
It involves putting the employees you don’t currently need on furlough – a temporary leave of absence – as opposed to letting them go. You can then claim 80% of the employee’s monthly wage from the government. This includes any employer national insurance contributions and employer pension contributions on that wage.
There is a maximum of £2,500 per month and claims are available to anyone that’s been on your PAYE payroll since 28th February 2020. Crucially, it also covers those who were made redundant after 28th February but have since been rehired. This means if you initially panicked and let staff go, you can still keep them on and support them through the coming months.
Deferred VAT payments
This scheme defers VAT payments for the next three months. This means that if you’re a VAT registered UK-business and have a VAT payment due between March 20th 2020 and June 30th 2020, you can choose to defer the payment until a later date. This gives you the chance to save your money for the areas of business that need it most.
PAYE versus self-employed
In the case of smaller businesses, your furloughed staff may be PAYE and therefore eligible for the government’s job retention scheme. But you, as the owner, might still be considered self-employed.
If this is the case, you may be eligible for the Self-employment Income Support Scheme (SEISS). This allows you to claim a taxable grant that’s worth 80% of your average trading profits, a maximum of £2,500 per month, for the next three months.
Under government regulation, Statutory Sick Pay (SSP) is available if an employee must stay at home to isolate – even if they themselves are not the one who is unwell.
But the government has passed legislation that allows small and medium-sized businesses to reclaim any COVID-19-related SSP. The refunds cover up to two weeks of SSP per eligible employee. But it’s only available to businesses that had fewer than 250 employees as of 28th February 2020.
It’s worth noting that although many of these schemes contain three-month limits, these are flexible. The government remains open to extending these should the COVID-19 crisis continue past this point.
During this difficult period, it’s important to be realistic and try to do the best for both your business and your staff. The government has introduced these schemes in order to support individual businesses, entire industries, and our wider economy. It’s important you take the time to research what’s available to you before making any big decisions or letting valued employees go. If you need any more information and guidance, you can find it on the government website here.
At Big Hand, we understand the immense pressure business owners are under. These are unprecedented times and it’s important we all support one another. Whether you’re looking for guidance on navigating the next few months or just need some general business advice, call us on 0161 327 2911 today.