How to make sure your business doesn't lose out in lockdown
Money is still available via government schemes to help small companies cope with the latest Covid restrictions. David Prosser outlines what you can get, and how to get it.
![Rishi Sunak](https://cdn.mos.cms.futurecdn.net/MqrbCrqvxSVxadrZ5FnqDX-415-80.jpg)
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
To check whether you are eligible, contact your local authority, though it should be making payments automatically rather than requiring applications. Firms outside the retail, hospitality and leisure industries may also receive help, with £594m available for a discretionary fund that councils can use to support firms beyond the main scheme.
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.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
![https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg](https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748-320-80.jpg)
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.
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
David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.
-
Skipton launches a retirement bond with monthly income – is it any good?
The building society has launched a new three-year fixed-rate bond for those aged 66 and over. Can it boost your retirement income?
By Katie Williams Published
-
Pensions: 140,000 pensioners to be hit by surprise tax demand
Tens of thousands of pensioners will be written to over the summer because their pensions have gone above the frozen income tax thresholds
By Chris Newlands Published
-
CrowdStrike IT outage: a global meltdown
Millions were affected by the CrowdStrike IT outage recently, which grounded flights and took the news off the air. Was this just a hiccup or a warning of much worse to come?
By Simon Wilson Published
-
Could the new Growth Guarantee Scheme help boost your business?
The new government-backed Growth Guarantee Scheme is aimed at helping businesses recover from the pandemic. Is it worth considering and are you eligible?
By David Prosser Published
-
Revolut founder Nik Storonsky cashes in – what's next for the fintech billionaire?
Nik Storonsky has shaken up the banking industry with Revolut. He is now preparing a new project that could do the same to the venture capital sector
By Jane Lewis Published
-
Is local production making a comeback?
Companies return production closer to home and shorten their supply chains due to the pandemic and geopolitical turmoil. How should investors react?
By Dr Matthew Partridge Published
-
French election: an unexpected win for the left-wing
The snap French election delivered a stalemate. What does this mean for the country's stability?
By Dr Matthew Partridge Published
-
Business owners watch out for capital gains tax reforms
If you plan to sell your firm, look out for changes to capital gains tax rules by the new government
By David Prosser Published
-
How businesses can cut energy costs and boost efficiency
Here's how small businesses can monitor energy costs even though they don't benefit from the Ofgem energy price cap.
By David Prosser Published
-
What could a general election mean for apprenticeships?
Labour and the Conservatives have competing approaches when it comes to apprenticeships and funding young workers. But how are they supporting small businesses?
By David Prosser Published