As businesses slowly start to reopen and rebuild following yet another national lockdown, directors may be wondering what kind of aid is available to assist in this process. To this end, Voscap has compiled a list of all of the Covid-19 business support schemes available. Of course, this list may prove overwhelming, so if you would rather discuss your options with one of our business recovery experts, simply call Voscap Business Recovery on 020 7769 6831.
Furlough (Coronavirus Job Retention Scheme)
The CJRS has been extended until 30 September 2021. Currently under this scheme the government will pay 80% of furloughed employees’ wages (up to a maximum of £2500 per month per employee) whilst employers must pay the employees’ National Insurance and pension contributions.
In July 2021, employers will need to pay 10% of the wages, and in August and September that will rise to 20%.
Self-Employed Income Support (SEIS)
As with the CJRS, the SEIS scheme has been extended until September 2021. Under this scheme, the self-employed whose trading profits have been significantly impacted by the pandemic can claim grants worth up to 80% of 3 months of their average trading profits, capped at £7,500 per grant.
The fourth of these grants covers the period February to April 2021, with applications open from late April. The fifth grant will cover May to September 2021 and take into account the actual reduction in turnover, with both the standard 80% of 3 months’ average trading profits grant & a smaller 30% grant available depending on the level of turnover reduction.
The fourth grant marks the first time the newly self-employed can be eligible, with the loans available to self-employed individuals or members of a partnership who traded in both the tax years 2019-2020 (and submitted a tax return by 2 March 2021) and 2020-2021, and either:
- are currently trading but are impacted by reduced demand due to coronavirus
or
- have been trading but are temporarily unable to do so due to coronavirus.
Trading profits must also be no greater than £50,000 and at least equal to non-trading income to be eligible.
Business Rates Holiday
During the 2020-2021 tax year, rateable businesses in the retail, hospitality and leisure sectors will not have to pay any business rates. Local councils will apply the discount automatically and businesses are eligible if their property is a:
- shop
- restaurant, café, bar or pub
- cinema or live music venue
- assembly or leisure property
- hospitality property
These businesses may also be eligible for a business rates retail discount in the tax year 2021-2022. With this discount, eligible businesses could get a 100% rates reduction for the first 3 months (1 April to 30 June 2021) and up to a 66% reduction for the remaining 9 months (1 July 2021 to 31 March 2022).
Reduced VAT Rate
The reduced rate of 5% VAT introduced last year has been extended until 30 September 2021. It will then rise to 12.5% until it returns to the standard rate of 20% in April 2022. This reduced VAT rate applies to certain supplies relating to hospitality, hotel & holiday accommodation, and admissions to certain attractions.
Deferred VAT Payments
Businesses with outstanding VAT payments deferred from 20 March – 30 June 2020 can now pay these in full or join the VAT deferral new payments scheme, which allows them to pay the deferred VAT in equal instalments interest free, and choose the number of instalments (ranging from 2 to 11 depending on the date of joining the scheme).
Restart Grant
A new fund announced in the Budget, these are one-off grants available from 1 April 2021 to help businesses in the non-essential retail, hospitality, leisure, personal care and accommodation sectors to reopen safely as we emerge from lockdown. Eligible businesses can receive a grant up to £6,000 from their local council if they are in the non-essential retail sector, or up to £18,000 in the hospitality, accommodation, leisure, personal care and gym sectors (calculated on the rateable value of the business).
This grant will replace the various Local Restrictions Support Grants, the deadline for which passed on 31 March 2021.
Additional Restrictions Grant (ARG)
The ARG is a fund available to support businesses that are severely impacted by coronavirus restrictions, but that aren’t covered by other grant schemes or where additional funding is needed. It is at local councils’ discretion which businesses they support with this fund and how much they award, but the businesses awarded the grant could include those that don’t pay business rates and those that haven’t received wider grant support.
Bounce Back Loan Scheme (BBLS)
The BBLS allows small- and medium-sized businesses to borrow between £2,000 and £50,000 (up to 25% of their annual turnover). Loans are 100% government-backed, with no fees or interest to pay for the first 12 months.
The BBL is a 6 year loan, but the Pay As You Grow scheme allows businesses to extend the term to 10 years, pause repayments for 6 months, or make interest only repayments for 6 months. To find out more about Bounce Back Loans and Pay As You Grow, read our previous article [insert link to BBLS article].
New applications can be made and businesses with existing Bounce Back Loans lower than their maximum amount can request to top up their loan until 31 March 2021.
Coronavirus Business Interruption Loan Scheme (CBILS)
Under this scheme, small- and medium-sized businesses can apply for various finance options up to £5 million. 80% of the finance is government-guaranteed, and the government pays the interest and any fees for the first 12 months. Types of finance available include loans, overdrafts and invoice or asset finance facilities, with some types allowing up to 3 years for repayment and others allowing up to 6 years. The application deadline is 31 March 2021.
Coronavirus Large Business Interruption Loan Scheme (CLBILS)
Larger businesses, with annual turnovers exceeding £45 million, can instead take advantage of the CLBIL scheme, allowing them to apply for 80% government-backed finance options up to £200 million (or 25% of annual turnover, whichever is lower). Finance options include loans, revolving credit facilities (including overdrafts), invoice finance, and asset finance, and are available from 3 months to 3 years. The application deadline is 31 March 2021.
COVID-19 Corporate Financing Facility (CCFF)
CCFF is a scheme backed by the Bank of England allowing large companies that make a material contribution to the UK economy and are affected by coronavirus to sell some of their short-term debt. The scheme will run for at least 12 months. Businesses participating in this scheme are ineligible for the CLBILS.
Recovery Loan Scheme
The Recovery Loan Scheme will be brought in to replace the BBLS and CBILS. Under this scheme, businesses of any size can apply for loans and other finance worth up to £10 million, supporting business as we emerge from the pandemic and begin to recover. The finance is 80% government-guaranteed, and the terms are up to either 6 or 3 years, depending on the kind of finance.
The scheme launches on 6 April 2021, and will remain open until 31 December 2021, subject to review. Participation in previous COVID-19 government-guaranteed loan schemes does not preclude businesses from participating in the Recovery Loan Scheme.
In Need of Further Advice From a Business Recovery Expert?
The plethora of business support options available throughout Covid could easily become overwhelming. To find out which might be best suited to your business and its individual needs, contact us today on 020 7769 6831, or email team@voscap.co.uk.
