Update: The ongoing COVID-19 crisis is continuing to impact businesses and the Government recently came out with a new Winter Economy Plan to further financially support companies accross the UK.
The last couple of weeks have been filled with uncertainty for everyone. The tragedy of Coronavirus does not stop with health implications and deaths – it has also done significant harm to the UK economy. Hundreds of workers are already losing jobs as businesses are fearing for their survival.
To tackle this, the Government has been introducing new measures that will protect employees, the self-employed and businesses. The Government has made a promise to do “whatever it takes” to keep our economy moving. Therefore, the new financial support schemes are made in hopes that millions of people and businesses will be able to survive these challenging times. Here are all the latest Government’s financial support measures for businesses:
Business interruption loans scheme
This scheme is Government-backed financing that businesses can get from their regular channels, such as the High Street banks. Small and medium-sized businesses based in the UK will now have access to loans up to £5 million. These will be available for up to 6 years and interest-free for the first 12 months. To be eligible, your business needs to have a turnover of no more than £45 million per year.
Support for small businesses
As the small businesses are extra vulnerable at these times, the Government introduced an additional support scheme for small business. This is in the form of a one-off grant of £10,000. This funding is for small businesses that already pay little or no business rates due to rate reliefs (SBRR, RRR or tapered relief). You don’t need to do anything to apply for this grant – your Local Authority will contact you if your business is eligible.
Retail, hospitality and leisure sector
There is also some additional support for businesses in the retail, hospitality or leisure sector. These businesses will receive cash grants up to £25,000 per property. The amount of the grant will be decided based on the rateable value of the property. For instance, if the rateable value is up to £15,000, the grant will be of £10,000. Again, your Local Authority will reach out to you if your business is eligible for this cash grant.
Additionally, businesses in the retail, hospitality and leisure category in England will not have to pay any business rates for the 2020-2021 tax year.
Help for self-employed people
With around 15% of UK residents currently working self-employed, the Government had to make an additional support scheme for such people. The financial support for self-employed will cover 80% of the average monthly wages up to £2,500 per month, starting in June. This is available for those who earn under £50,000 per year – around 3.8 million residents in the UK.
In addition to this, the self-assessment payments will be deferred until January 2021, although this is optional and you are welcome to pay in January 2020 if you wish.
Additional business tax measures
There are also some additional measures for the business tax that have been introduced to further support businesses of all sizes. These include:
- The Start-up Loans Programme will be extended to £130 million;
- All VAT payments will be delayed for 3 months – taxpayers will have until the end of 2020-21 tax year to pay the liabilities for this period;
- From April 2020, the Employment Allowance will be increased to £4,000. Around 510,000 businesses and charities will be able to claim employer NICs reduction;
- The R&D credit will be increased from 12% to 13% – on a typical R&D claim this is worth £2,400;
- Buildings and structures allowance will be increased from 2% to 3% – this is an extra £100,000 of relief worth for investments in buildings that are worth £10 million;
- The enhanced capital allowances on plant or machinery expenditure will be 100% for the businesses working in enterprise zones;
- The nurseries in England will not have to pay any business rates for the tax year of 2020-2021
Additional personal tax measures:
There’s also some additional tax support available for the sole-traders who pay personal tax. Here are some of the main changes:
- The amount earned before paying 20% income tax will be frozen at £12,500;
- The £50,000 threshold at which people have to pay a higher 40% income tax rate will also be frozen;
- The NICs will be increased from £8,642 to £9,500 – supporting around 31 million people and removing 1.1 million people from class 1 and class 4;
- Once the annual income exceeds £200,000, the tax relief on pensions will be available;
- The people who work from home and already claim £4 a week off the income tax will be able to claim £6 from April, 2020;
- The Fuel Duty will be frozen for another year;
Lastly, the UK Government is constantly adding to these changes and financial support measures. Therefore, make sure to follow the latest information on COVID-19 to stay on top of any additional changes that may affect your business.
Need any help?
Here at ASfB we are lucky enough to be able to work as usual during these challenging times. This means that we are here to support you and help with any concerns you may have about your business.
You can get in touch with us by calling on 01202 755600 or email firstname.lastname@example.org