Financial support for your business

Whilst shops, bars and restaurants have started to open again, we are still far away from ‘business as usual’. Below we dig with our partner Coconut into the financial support still currently available to self-employed people, small business owners and the hospitality industry as a whole.LAST UPDATE : 25th September 2020

Self-Employed Income Support Scheme : Extended 

The Self-employment Income Support Scheme (SEISS) is designed to support self-employed people (sole traders and members of partnerships) whose income has been negatively impacted by COVID-19. The scheme provides a taxable grant based on profits.The scheme is now extended for another 6 months - from November 2020 to April 2021There will be 2 separate grants, as before:The first grant, for the three months from November until the end of January, will be worth 20% of average monthly profits, capped at £1,875 in total. As before, this will be paid out in a single instalment.If your business has been adversely affected by COVID-19 on or after the 14th July 2020, you can now apply for the second and final grant, and you must make your claim by the 19th October 2020.For more information on how this is calculated and to see if you are eligible visit Gov.uk

Job Support Scheme : Extended

Business owners who have placed employees on temporary leave (furlough) due to COVID-19. The eligibility of the scheme is complex so it’s worth discussing this with your accountant if you have one. There is also more detailed information on eligibility available on Gov.uk.If you can’t afford to maintain your workforce because your operations have been affected by COVID-19, you can furlough employees and apply for a grant to cover a portion of their usual monthly wages.From 1st September 2020: The Government contribution will be reduced to 70% of wages, up to a cap of £2,187.50 per month, for the hours the employee does not work. Employers must make up the difference of 10% to bring furlough payments to 80% of wages (up to a cap of £2,500) for unworked hours, while continuing to meet NIC and pension contributions on furloughed wages.From 1st October 2020: The Government contribution will be reduced to 60% of wages, up to a cap of £1,875 per month for the hours the employee does not work. Employers must make up the difference of 20% to bring furlough payments to 80% of wages (up to a cap of £2,500) for unworked hours, while continuing to meet NIC and pension contributions for furloughed wages.Extension: The Government will pay a third of hours not worked up to a cap (at £697.92 per month), with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped.Find out more 

Deferral on Business Rates

In England, business rates are charged on most non-domestic properties, like:

✅ shops
✅ offices
✅ pubs
✅ warehouses
✅ factories

holiday rental homes or guest housesYou’ll probably have to pay business rates if you use a building or part of a building for non-domestic purposes.Organisations within the retail, hospitality and leisure sectors in England will not have to pay business rates for the 2020 to 2021 tax year. Your local council may have to reissue your bill but this will be applied automatically.

Small Business Grant Fund

Small businesses in England which pay little or no business rates are entitled to a one-off cash grant of £10,000 from their local council.If you are eligible for the grant, your local council should have reached out to you, however if you believe you may be eligible check here for more information and reach out to your local council

Coronavirus Retail, Hospitality and Leisure Grant Fund

This fund is designed to support businesses in the retail, hospitality and leisure sectors with their business costs during coronavirus.Properties eligible for the grant will be those that are being used as a hospitality, retail, or leisure venue, such as a:

✅ shop
✅ restaurant, café, bar or pub
✅ cinema or live music venue
✅ estate agent or letting agency
✅ assembly or leisure property - for example, a bingo hall, a sports club, a gym or spa
✅ hospitality property - for example, a hotel, a guest house or self-catering accommodation

You cannot get funding for:

❌ properties occupied for personal uses, such as private stables, beach huts and moorings
❌ car parks and parking spaces

If your business has a property with a rateable value of £15,000 or under, you may be eligible for a grant of £10,000.If your business has a property that has a rateable value of over £15,000 but less than £51,000, you may be eligible for a grant of £25,000.You do not have to pay the grant back but it will be taxable. Only businesses which make an overall profit once grant income is included will be subject to tax.You do not need to take any action. If you’re an eligible business, your local council will contact you and provide details of how to claim. The grant will be paid to the person registered as the ratepayer for the property as of 11 March 2020. Contact your local council if you think you’re eligible for a grant but have not yet received it.

Bounce Back Loans (BBL) - Extended to November 30th

The scheme helps small and medium-sized businesses to borrow between £2,000 and £50,000, up to 25% of their annual turnover.The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.You can apply for a loan if your business:

✅ is based in the UK
✅ was established before 1 March 2020

has been adversely impacted by COVID-19Applications must be made directly to the lender, you can find a list of [all accredited lenders here

If you’re considering applying for a BBL, you’ll need to make your application by the 4th November. Applications made after this date will not be approved.

Coronavirus Business Interruption Loan Scheme (CBILS) - Extended to November 30th.

CBILS provides financial support to smaller businesses (SMEs) across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of COVID-19.The scheme helps small and medium-sized businesses to access loans and other kinds of finance up to £5 million available on repayment terms of up to six years.The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months.More information on how to apply can be found hereThe date has not been announced yet as to when this will end however, we would expect this to be in line with the Bounce Back Loans.

Annual account and 3 month-extension

If you are a Limited Company, you will now be able to apply for a three month extension on your deadline to submit annual accounts to Companies House.While companies will still have to apply for the extension to be granted, those citing issues related to COVID-19 will be automatically and immediately approved. Applications can be made through a fast-tracked online system which will take just 15 minutes to complete. If you have extended or shortened your Company year end, you may be ineligible.Follow the link here to apply for an extension to file your accounts to Companies House.

HMRC Pay-helpline

All businesses and self-employed people in financial distress with outstanding tax liabilities may be eligible to receive support with their tax affairs (PAYE, Corporation Tax, Self Assessment tax, VAT) through HMRC’s Time To Pay service.These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.If you’ve received a payment demand, like a tax bill or a letter threatening you with legal action, call the HMRC office that sent you the letter.If you’ve not yet received a bill or letter, but would like to discuss payment extensions, call the Payment Support Service.Payment Support Service

➡️ Telephone: 0300 200 3835
➡️ Monday to Friday, 8am to 4pm

Mortgage and Rental holidays

Mortgage borrowers or tenants can apply for a three month payment holiday from their lender or landlord. Both residential and buy-to-let mortgages are eligible. But interest will still be charged. This has been extended to 31st October 2020. Applications must be made directly to your mortgage company or landlord.

Cashflow Tips During COVID

Consider whether you can shorten payment terms with your customersWhen you reduce the number of days a customer can settle their invoice, you will receive payment faster. Remember, the quicker you get paid, the better your cash flow. Consider this when setting payment terms with any new customers.

  • Pay your suppliers at the latest allowable dateTo improve your cash flow you could look to pay your suppliers at the end of the terms. You may have 30 day or 60 day payment notices so if you need to improve your cash flow, make payment to your suppliers at the end of the 30 or 60 days.
  • Keep the cash position of your business under reviewDuring these tough times, keep your cash flow under constant review. Keep daily tabs on what money you have going in and out of your business. You may find there are some payments you can cancel and no longer need.
  • Ensure you have software in place to properly review your cash flowMake sure you have good software taking care of your finances that gives you easy to use and understand reporting on your cash flow. It's important during these times to have clear visibility on your funds and the runway you have if you have limited work coming in.
  • List all of your fixed and variable costs to see what can be cut.Are there any costs, whether fixed or variable, that can be reduced or cut during this time? It's definitely worth looking at all of your outgoings and assessing each item and whether it is a necessity, whether it could be reduced or if there is additional support etc, ie: payment freezes. Small changes to these can really help to improve your cash flow.

About Coconut

Coconut gives you the power of a finance team in your pocket.With expenses, invoicing and tax all in one, it’s the ultimate accounting and tax tool for self-employed people (sole traders and limited companies).Simply connect the bank account you’re currently using to manage your business income and expenses to the Coconut app and we’ll pull in and analyse all of your transactions for the last 12 months.You can also capture any PAYE or rental income and student loan repayments in the app, so we can take that into account in your tax estimate. So if you’re still spending too much time worrying about your finances, maybe now’s the time to give Coconut a tryYou can also check out all the safety rule for hospitality businesses

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