Coronavirus business grants: A guide to the business funding available

With many businesses experiencing major cash flow issues because of COVID-19, the government is providing different measures of support, including some coronavirus business grants.

Rhiannon Philps 12 November 2020

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Businesses that are struggling with their cash flow, as a direct or indirect result of coronavirus, may be eligible for one of the many measures of support that the government has recently laid out.

The Chancellor of the Exchequer, Rishi Sunak, announced a preliminary package of coronavirus business support in the 2020 Budget, but this has since been extended and expanded upon.

Because of the ongoing changes to the support offered by the government, it can be difficult for businesses to keep track of what assistance is available. Below is a guide to the business grants, rates relief, and other funding that businesses can receive, to help them through the coronavirus outbreak.

The following information on grants and business rates only applies to companies in England. Scotland, Wales, and Northern Ireland offer similar measures, but some of the details will differ.

Business rates holiday

Every retail, hospitality, and leisure business, whatever their size, can benefit from a business rates holiday this financial year. This means they won’t need to pay any rates from April 2020 to 2021.

Some of the businesses that are eligible for the business rates holiday include cafes, restaurants, bars, shops, hotels, cinemas, live music venues, and other organisations operating in the relevant sectors.

Nurseries for Early Years children will also be exempt from any business rates for the 2020 to 2021 tax year.

The business rates holiday should be automatically applied to your next council tax bill.

Retail, Hospitality and Leisure Grant Fund (RHLG)

As well as a rates holiday, businesses in the retail, hospitality, and leisure industries with a rateable value of under £51,000 are also eligible for a cash grant.

Businesses with a rateable value of up to £15,000 can receive a grant of £10,000. Meanwhile, businesses with a rateable value of between £15,000 and £51,000 can receive a grant of £25,000.

If your business has a rateable value of over £51,000, or you don’t normally pay business rates, you won’t be eligible for this particular grant.

You do not need to apply directly to this scheme. Your local authority should contact you with further details if you are eligible.

Small Business Grant Fund (SBGF)

The Small Business Grant Fund is meant to help smaller businesses that already benefit from rate relief, by giving them a one-off £10,000 grant to cover their immediate and ongoing costs.

It is available to businesses that receive Small Business Rates Relief (SBRR) or Rural Rates Relief (RRR). Businesses with a rateable value between £12,000 and £15,000 that normally receive tapered rates relief may also be eligible for this grant.

Your local authority should contact you with information on receiving this grant- you do not need to fill out any applications.

Coronavirus Job Retention Scheme

The job retention scheme enables employers to keep workers on their payroll, rather than making them redundant.

With many businesses struggling to pay the full wages of their employees because of the impact of coronavirus, there is a risk that many workers could be laid off. The job retention scheme helps to avoid this issue by covering 80% of the costs of each employee’s wages. It ensures that businesses can keep their workforce ready for when the situation improves, and also ensures that workers can continue to receive a salary even though they’re not currently able to work.

If employees are forced to temporarily stop working but are kept on the company’s payroll, HMRC will reimburse 80% of their wages, up to a maximum of £2,500 a month. The scheme is open to all businesses that pay employees via the pay as you earn (PAYE) system.

To get the refund, employers would need to change the status of employees to “furloughed workers”, to show that they are temporarily not working but are still on the payroll. Employees will need to be consulted and informed of this decision. Once this is completed, businesses should then submit the relevant information to HMRC through the system that was launched on 20th April.

The scheme can cover the cost of wages dated from 1st March. It was initially planned to run for 4 months, but on 12 May this was extended to 31 October 2020.

Coronavirus Self-Employment Income Support Scheme

Self-employed individuals and members of a partnership who are struggling with their income can receive a grant to help out with costs.

The grant will cover up to 80% of your profits for a 3 month period, up to a maximum of £2,500 a month. The sum you receive will be calculated from the average profits made in the tax years 2016-17, 2017-18, 2018-19.

It is available to those with an average trading profit of less than £50,000 a year and to those who get more than half their income from self-employed activities. To receive the grant, individuals will need to have submitted their 2018-19 Self-Assessment tax return.

HMRC will contact all those who are eligible and give more details on how to apply. The grant will be paid in one lump installment and will be paid from the start of June.

Statutory Sick Pay Rebate

SMEs can reclaim any Statutory Sick Pay (SSP) that they pay to employees who are forced to take time off work because of COVID-19. This could be if the employee has contracted the virus or if they need to self-isolate.

Employers can receive a refund for up to 2 weeks of SSP for each eligible employee, and should keep a record of any absences and SSP payments. Employees will not need to provide a doctor’s note as evidence to receive SSP, but they can get an isolation note from the NHS 111 online website if the employer requires it.

Other business support measures

To help ease the financial pressures on businesses, the government has deferred both VAT and income tax payments for all UK companies.

The deferral for VAT payments applies from 20th March 2020 until 30th June 2020.

Income Tax Self-Assessment payments that were due on 31st July 2020 can now be deferred until 31st January 2021, if individuals prefer.

If a business or any self-employed person is struggling to pay their tax bill because of their financial difficulties, they can contact HMRC through their Time to Pay Service. They may be able to get some support with their tax liabilities, but the help available will depend on each individual case.

Coronavirus Business Interruption Loan Scheme

As well as grants, businesses can apply for a loan up to the value of £5 million to help them through the uncertainty caused by the coronavirus outbreak.

Funding is available in the form of standard loans, overdrafts, invoice finance, and asset finance, with terms of 3 or 6 years depending on the option you choose. To help businesses with the initial costs of the loan, the government will cover the first 12 months of interest payments and any fees the lender charges.

Businesses with an annual turnover of up to £45 million are eligible to apply through a participating lender. For more information, see our guide to business interruption loans.

This particular scheme is targeted at businesses that lenders may be more reluctant to approve for credit because of the COVID-19 outbreak. If you are in a position to do so, you can still apply for business loans and other forms of funding in the usual way.

Bounce Back Loan Scheme

The coronavirus Bounce Back Loan scheme will help small businesses borrow between £2,000–£50,000 for up to six years. It was designed to support businesses that were struggling to access the Coronavirus Business Interruption Loan Scheme.

The Government will guarantee 100% of the loan and no fees or interest will be incurred within the first 12 months. For more information, see our to how to apply for a Bounce Back Loan guide.

About the author:

Rhiannon is a financial writer for NerdWallet, with a particular interest in personal finance and insurance guides for consumers. Read more

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