For small businesses struggling to cope with the latest lockdown, new financial assistance from the government is limited. But help is still available from the schemes set up the first time around. Chancellor Rishi Sunak’s headline announcement last week was a new lockdown grant scheme aimed at retail, hospitality and leisure businesses. In England, this scheme, administered through local authorities, pays grants of up to £9,000 to companies in the sectors forced to close, with the exact amount depending on the rateable value of your business premises. There will be similar payments in Scotland, Wales and Northern Ireland.
Start with your local council
These new grants are in addition to the Local Restrictions Support Grants scheme launched before Christmas. That pays up to £1,500 for each 14-day period that your business is forced to close because of lockdown measures, or up to £2,100 for each 28-day period it remains open but severely affected by the restrictions. Again, the size of the grant you will receive depends on the rateable value of your business premises. Local authorities are also administering this scheme.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
On top of this new support many of the programmes launched last year have been extended, including the Coronavirus Job Retention Scheme (CJRS), which will remain open until April 2021. The CJRS is the scheme through which firms can furlough their staff – lay them off for a temporary period – and have their wages paid by the state. The state will pay at least 80% of staff wages up to £2,500 a month. Employers must pay national insurance and pension contributions for each employee. Two flagship loan schemes have also been extended, with applications accepted for both the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan programme until 31 March. The former offers finance of up to £5m; the latter provides advances of up to £50,000. If you have previously used the schemes, but not borrowed the full amount, you can apply for more funding.
Finally, don’t overlook the option of deferring tax payments. Businesses were given the option of deferring VAT due during the second quarter of last year and this can now be paid back in monthly instalments over the period to March 2022.
And if you are covered by the self-assessment system, the bill you would normally pay at the end of this month does not have to be settled until January 2022. This is also the deadline for any income tax due in July 2020 that you chose to defer.
More money for the self-employed
Self-employed workers hit financially by the Covid-19 crisis have until 29 January to apply for the latest iteration of the Self-Employment Income Support Scheme (SEISS). But hundreds of thousands will miss out on the SEISS unless the government extends it. This round offers grants worth 80% of your average monthly trading profits, paid in a single instalment to cover three months’ worth, but capped at £7,500.
Crucially, to make a claim, you must have been eligible for previous rounds of the SEISS (even if you didn’t claim). That means you must have earned the majority of your income from self-employment in the 2018-2019 tax year; recorded a profit of less than £50,000; and drawn down this profit as income rather than company dividends.
Excluded UK, a group that represents people struggling to secure help from the government, says more than three million people are missing out on schemes such as the SEISS because of the eligibility criteria.
The Federation of Small Businesses this week unveiled proposals for a version of the SEISS offering similar levels of redress to self-employed workers set up as small companies, rather than sole traders, and paid via dividends. This could help more than one million people. But so far the government has consistently refused to extend the SEISS or to launch a similar scheme for those missing out.
-
What is the 25x retirement rule and does it work?The 25x retirement rule has been around for decades but many experts question if it is a suitable strategy
-
When is the self-assessment tax return deadline?If you are self-employed, rent out a property or earn income from savings or investments, you may need to complete a self-assessment tax return. We run through the deadlines you need to know about
-
The financial crisis in UK universities – what can be done?UK universities are running out of cash and have begun to shed staff; bankruptcies look likely. What’s gone wrong, and what should be done about it?
-
'Governments are launching an assault on the independence of central banks'Opinion Say goodbye to the era of central bank orthodoxy and hello to the new era of central bank dependency, says Jeremy McKeown
-
Why investors can no longer trust traditional statistical indicatorsOpinion The statistical indicators and data investors have relied on for decades are no longer fit for purpose. It's time to move on, says Helen Thomas
-
The most likely outcome of the AI boom is a big fallOpinion Like the dotcom boom of the late 1990s, AI is not paying off – despite huge investments being made in the hope of creating AI-based wealth
-
The rise of Robin Zeng: China’s billionaire battery kingRobin Zeng, a pioneer in EV batteries, is vying with Li Ka-shing for the title of Hong Kong’s richest person. He is typical of a new kind of tycoon in China
-
How retail investors can gain exposure to Lloyd’s of LondonIt’s hard for retail investors to get in on the action at Lloyd’s of London. Here are some of the ways to gain exposure
-
The goal of business is not profit, but virtueOpinion Serve your customers well, and the profits will follow, according to a new book. It rarely works the other way around, says Stuart Watkins
-
Earnings estimates are a rigged game – especially in the USThe number of US stocks beating earnings estimates tells us only that guidance has deliberately been set too low
