Coronavirus: what support is available for small businesses and the self-employed?

As restrictions ease, it can be difficult to know what coronavirus support is still available for your business. So, here’s a list of coronavirus support schemes, designed to help you work out which ones are right for you and your business.

• Coronavirus Job Retention Scheme (CJRS) – help to pay furloughed employees’ salaries
• The Restart Grant
• Business rates holiday and discounts for tax year 2021-22
• Business rates holiday for nurseries
• Recovery Loan Scheme
• Additional Restrictions Grant for businesses that aren’t covered by other grants
• Protection if you can’t pay your commercial rent
• Full refund on statutory sick pay due to Covid-19
• Self-Employment Income Support Scheme (SEISS)
• HMRC Time to Pay – its stance on collecting coronavirus tax debts
• More time to file annual accounts with Companies House
• Self-employed benefits
• Employment and Support Allowance (ESA)
• Coronavirus business and self-employed support in Scotland, Wales and Northern Ireland
• Look after your business’s greatest asset

Coronavirus Job Retention Scheme (CJRS) – help to pay furloughed employees’ salaries

If you have staff, including apprentices, you’d otherwise have to lay off due to the Covid-19 outbreak, the furlough scheme pays a portion of an employee’s salary, up to a maximum of £2,500 a month.

The CJRS ended on 30 September 2021, after being extended in the Chancellor’s Spring Budget.

The furlough scheme gives employees 80 per cent of wages up to a cap of £2,500.

But as of 1 July 2021, employers have had to contribute 10 per cent to make up the 80 per cent. In August and September, the employer contribution is 20 per cent.

Employers still pay employer National Insurance contributions (NICs) and pension contributions.

You can use flexible furloughing (whereby an employee does some of their hours and you pay them normally) as well as full-time furloughing, and you can top up your employee’s wages if you want to. When on furlough, employees can’t do any work that makes money or provides services for you.

How do I get this support?

Gov.uk says that claims can be made:

• in respect of an employee for a minimum seven day claim window
• in advance

All employers with staff can claim support – you don’t need to have used the scheme previously. You should be using a UK bank account and UK PAYE.

The application process involves:

1. Identifying your employees as ‘furloughed workers’, which means staff who have to take unpaid leave
2. Telling the affected employees in writing they’re now furloughed or flexibly furloughed
3. Working out how much you need to claim for using the government calculator

You can read more about claiming through the furlough scheme at gov.uk.

The Restart Grant

The Restart Grant was a one-off payment of up to £18,000 designed to support businesses as restrictions eased.

The Restart Grant closed for new applications on 30 June 2021. The government says that if you haven’t received your grant by 31 July 2021, get in touch with your local council.

Business rates holiday and discounts for tax year 2021-22

All retail, leisure and hospitality businesses can get a discount on their business rates in response to the Covid-19 pandemic. These businesses include:

• shops
• restaurants, cafés, bars, pubs
• cinemas, live music venues
• assembly or leisure properties, like sports clubs, gyms, spas
• hospitality properties, like hotels, guest houses, self-catering accommodation

The business rates discount was 100 per cent for April 2020 to March 2021 and the first three months of the 2021-22 tax year.

For the rest of the 2021-22 tax year (July to March), eligible businesses get 66 per cent off their business rates, up to a total value of £2 million.

How do I get this support?

You should speak to your local council about the business rates discount, if it hasn’t already been applied automatically.

You can use the government’s business rates calculator to find out what discount you’ll be getting.

Read more about business rates.

Business rates holiday for nurseries

Like the business rates holiday for retail, leisure and hospitality, nurseries are still eligible for a business rates discount.

The discount is 66 per cent (capped at £105,000) for July 2021 to March 2022, down from 100 per cent previously.

To be eligible, the building needs to be occupied by providers on Ofsted’s Early Years Register, and completely or mainly used to provide the Early Years Foundation Stage (care and education for children up to age five).

How do I get this support?

Check with your local council if the discount hasn’t been automatically applied already.

Recovery Loan Scheme

The government launched the Recovery Loan Scheme on 6 April 2021.

This replaced previous government guaranteed coronavirus loan schemes that ended on 31 March, including the Bounce Back Loan Scheme and the Coronavirus Business Interruption Loan Scheme.

Through the scheme, businesses can get between £25,000 and £10 million, with the government giving lenders an 80 per cent guarantee.

The scheme was scheduled to run from 6 April until the end of the year. However, a six-month extension to the scheme was announced in the Chancellor's Autumn Budget, so it will now run until 30 June 2022. However, businesses will only be able to apply for £2 million and the government guarantees 70 per cent of the loan, rather than 80 per cent.

How do I get this support?

The scheme launched on 6 April 2021. You’ll be able to access the scheme through the government’s network of approved lenders.

You can see the list of approved lenders and find out how to apply on the British Business Bank website.

Additional Restrictions Grant for businesses that aren’t covered by other grants

Local authorities can give out this discretionary funding to businesses that aren’t eligible for other grants. The government gives examples of who the funding could be given to:

• businesses which supply the retail, hospitality, and leisure sectors
• businesses in the events sector
• business required to close but which do not pay business rates

You can’t get funding if your business is in administration, insolvent or has been struck off the Companies House register.

How do I get this support?

You’ll need to speak to your local authority about this grant.

Protection if you can’t pay your commercial rent

The government announced that commercial tenants who can’t pay their rent as a result of the Covid-19 outbreak will be protected from eviction.

The government has extended its initial ban on business evictions multiple times and it's now due to end on 25 March 2022.

The government says that businesses that can pay rent should continue to do so, as the ban is designed to protect businesses struggling the most. Rents also should start being paid as businesses open up.

The long extension is designed to give commercial tenants and their landlords time to come to an agreement about how to repay the money built up during closures.

Read more about the ban on commercial evictions.

How do I get this support?

Commercial tenants and landlords are being encouraged to come to voluntary arrangements on repayment.

The government introduced a new code of practice in June 2020, designed to help struggling businesses and landlords work together on rent payment issues.

Gov.uk makes it clear that this is protection from eviction if you can’t pay your commercial rent right now, because of the pandemic. It’s not a rent holiday, and commercial tenants will still be liable for the rent.

Full refund on statutory sick pay due to Covid-19

SMEs with fewer than 250 employees as of 28 February 2020 will get a full refund from the government on 14 days of statutory sick pay per employee off sick with Covid-19. Any sickness you claim for needs to have started on or after 13 March 2020.

How do I get this support?

You don’t need a doctor’s note from your employee, but they do have to either:

• have had coronavirus
• be unable to work because they’re self-isolating
• or be shielding in line with public health guidance

More details and the online repayment system for coronavirus-related SSP is now available on the government website.

Make sure you keep records of all absences and statutory sick pay payments due to Covid-19 (this is good practice for your business for any sickness, at any time).

Read more about statutory sick pay.

Self-Employment Income Support Scheme (SEISS)

The fifth and final SEISS grant will cover May 2021 to September 2021 and will pay:

• 80 per cent of your average trading profits for three months if you’ve seen a drop in turnover of 30 per cent or more
• 30 per cent if you haven't been as severely affected

You need to give HMRC two turnover figures so they can see how you’ve been affected – one pandemic figure (covering April 2020 to April 2021) and a reference figure (your turnover for 2019-20).

If you submitted a 2019-20 tax return by midnight on 2 March, you’re eligible. This means people who were newly self-employed can now apply for the grants.

Your average trading profit takes your total trading profits or losses for tax years 2016-17 + 2017-18 + 2018-19 + 2019-20 into account.

You’ll need to take in trading profits of no more than £50,000, and make more than half of your income from being self-employed, to be eligible for the taxable grant.

While you’ll still owe income tax and National Insurance on any money you get through the SEISS, it’s a grant rather than a loan. This means you won’t need to pay it back.

Read more about SEISS.

How do I get this support?

You can make your application on the gov.uk website.

The fifth grant will be available to claim from July 2021 and closes on 30 September.

You’ll need to have a tax return for 2019-20. You can’t be a limited company or operate a trade through a trust.

Other eligibility criteria include:

• you traded in tax year 2019-20
• you’re trading when you apply, or you would be if the pandemic hadn’t stopped you
• you plan to keep trading in tax year 2021-22
• you’ve lost trading profits because of coronavirus

The government says you need to declare that you intend to continue to trade in 2021 and 2022. You should be either:

• actively trading but facing reduced demand because of coronavirus
• temporarily unable to trade because of coronavirus, if you were previously trading

While you need to have been eligible for the previous grants, you don’t have to have claimed them.

If you’re not eligible, you can claim for Universal Credit (more below), which you should record as part of your income from self-employment. You may also consider applying for the Recovery Loan Scheme, mentioned earlier.

HMRC Time to Pay – its stance on collecting coronavirus tax debts

HMRC has given taxpayers the opportunity to defer tax payments and deadlines throughout the pandemic. For example, Self Assessment taxpayers could delay paying their January 2021 bill in full to January 2022.

HMRC has now announced that as the country reopens and economic activity resumes, debt collection activity will restart.

The tax authority will take an “understanding and supportive approach” to collecting debt, announcing that it’ll work with people to agree a plan based on their financial position.

HMRC says that it’ll contact customers in the first instance to discuss their situation. It’s important not to ignore this contact (although make sure that the messages are genuine first). HMRC might offer a payment plan, otherwise known as a Time to Pay arrangement.

But if taxpayers don’t willingly discuss their situation and refuse to pay, HMRC says it’ll try to visit them – and then start enforcement action. This is why it’s important to be open and upfront about any debt.

How do I get this support?

If you have a tax debt and HMRC tries to get in touch with you, make sure you speak to them. Alternatively, you can proactively try to get in touch with HMRC about your tax debt.

HMRC’s dedicated coronavirus helpline is 0800 024 1222, but be aware it may take longer than usual to speak to an adviser. Decisions about any extra time you get to pay your bill will be made on a case-by-case basis.

Read more about HMRC’s Time to Pay service.

More time to file annual accounts with Companies House

If your business is registered with Companies House, you can use an online service to apply for an extension to the deadline for filing your accounts. Businesses granted this extension won’t get the usual late filing penalty.

The service says “you can apply for more time to file if something has happened that is out of your control and you cannot file your company accounts on time”.

How do I get this support?

You need to apply for the extension using the online system. It takes 15 minutes and you should give a full explanation of why you’re applying.

Read more about corporation tax.

Self-employed benefits

The government made some changes to benefits like Universal Credit throughout the coronavirus pandemic, making it easier for self-employed people to apply.

However, from 31 July 2021, some of the changes look set to disappear. For example, the minimum income floor might apply to you if you're 'gainfully' self-employed.

The minimum income floor is based on what the government expects you to earn rather than what you actually earn, and determines how much Universal Credit you’ll receive.

If you’re struggling, it’s useful to check which benefits you might be able to apply for.

How do I get this support?

You can contact your local Citizens Advice, who will be able to talk to you about your options.

You can also read about Universal Credit at gov.uk and have a look at our guide to benefits for self-employed people.

Employment and Support Allowance (ESA)

ESA is for people with a disability or health condition that affects how much they can work. You can apply for ‘new style’ ESA if you can’t get Statutory Sick Pay and you or your child are ill or self-isolating because of coronavirus.

Once you’ve been assessed, you’ll be placed into one of two groups. The amount you’ll get depends on whether you can get back into work:

• up to £74.70 a week if you’re able to get back into work
• up to £114.10 a week if you’re unable to get back into work

How do I get this support?

The government website has details on eligibility and how to claim ESA.

Coronavirus business and self-employed support in Scotland, Wales and Northern Ireland

Some of the support measures available to help small businesses through the pandemic are administered by the devolved governments. You can find out more about small business support measures specific to the devolved nations on gov.uk.

• Scotland
• Wales
• Northern Ireland

Look after your business’s greatest asset

If you’re self-employed, you are your business’s most valuable asset – so look after yourself. The Mental Health Foundation offers useful advice on looking after your mental health during the coronavirus outbreak. You can also find tips and resources on our Better for Business wellbeing hub. Equally, if you’re a small business owner with employees, you can share these tips with your staff.