How to apply for Winter support to help your business through the pandemic
Rishi Sunak recently announced a new business support package and scheme extensions to help UK businesses pull through this Winter. Included in this announcement was the extension of the furlough scheme, or the Coronavirus Job Retention Scheme (CJRS). Businesses can apply for furlough support until 31st March 2021, while self-employed workers can receive an increased support grant of up to 80% of their average profits – up from 55% previously. Here’s what you need to know about applying for business funding.
(Furlough) Coronavirus Job Retention Scheme (CJRS)
Employees can now receive 80% of their current salary for hours not worked, right up until 31st March 2021. Employers will only be asked to cover National Insurance and employer pension contributions for hours not worked. For an average claim, this accounts for 5% of total employment costs (or £70 per employee per month). An employee is eligible if they were on the payroll before 31st October 2020. The scheme will be reviewed in January, so watch this space! Find out more here.
Government backed loan schemes
CBILS – Coronavirus Business Interruption Loan Scheme
Applications for this funding scheme to smaller businesses affected by Covid-19 has been extended to 31st January 2021. The package offers loans finance up to £5 million with the government guaranteeing 80% of the finance to the lender. They will pay any interest and fees for the first 12 months.
Your business must be UK based with an annual turnover of less than £45 million and must prove that it was adversely affected by the pandemic and able to operate normally. The loan duration can be from 3-6 years.
Bounce Back Loan Scheme (BBLS)
This scheme is designed to help smaller businesses access finance more quickly during the coronavirus outbreak. Businesses can borrow between £2,000 and 25% of their turnover (up to £50K). The government guarantees 100% of the loan with no fees or interest to pay for the first 12 months. After this period, the interest rate is 2.5% a year.
If you’ve already applied for a loan, you can still top up your finance, provided you didn’t borrow the maximum amount available to your business. To apply you must be a UK business established before 1st March 2020 and prove that your trading has been adversely affected by the Coronavirus. There are some exemptions to businesses in certain sectors, e.g. public sector bodies.
Applications open until 31st January 2021.
Self-employment Income Support Grant Scheme (SEISS)
This grant has been extended with support available from November 2020 until Spring 2021. The extension provides two further grants, each available for 3-month periods covering November 2020 to January 2021 and February 2021 to April 2021.
Funding is calculated at 80% of 3 months average monthly trading profits, paid out in a single instalment and capped at £7,500 in total. It’s important to note that these grants are taxable income and subject to National Insurance contributions, however your accountant should be aware of this when filing your accounts and tax return.
To claim for this scheme, you can apply online from 30th November 2020 via GOV.UK.
2020 has certainly tested us all and we know that the next quarter will be just as tough for many businesses. If you need help or advice on any of the above, please do give us a call (01752 665134). We are still open and here for businesses.