24 Mar COVID-19: What help is available for small businesses and sole traders?
The current coronavirus crisis is hitting everyone in the UK, from employees and freelancers to small businesses and the largest multi-national corporations. While many of us may still struggle if the economy continues on its current downward turn and social distancing measures tighten further, the government has announced a package which includes loans, grants, and reduced rates for businesses up and down the country, amounting to over £330 billion.
The package is a complicated one, which makes many changes and additions to the help that sole traders and small businesses can access, and more measures are likely to be announced soon. Here’s a rundown of some of the biggest changes announced so far that small business owners and sole traders must be aware of.
Coronavirus Business Interruption Loan Scheme
This loan scheme is intended to help bridge the gap for businesses directly affected by the coronavirus crisis. Rishi Sunak said: “Any business who needs access to cash to pay their rent, the salaries, suppliers, or purchase stock, will be able to access a government-backed loan, on attractive terms.” The Coronavirus Business Interruption Loan scheme will allow small businesses to borrow up to £5 million in order to cover costs during this difficult period.
Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme is open to all UK businesses, and will see salaried workers paid 80% of their usual pay, up to a maximum of £2500 per month, by the government, provided they are marked as furloughed workers. This should make retaining staff during a potentially long period of closure much less costly. Employers may also top up furloughed staff wages themselves.
VAT and tax deferrals
Rishi Sunak also announced that VAT payments will be deferred by 3 months, and income tax payments for self-assessed self-employed workers will be deferred until January 2021.
Sick pay support
Changes to Statutory Sick Pay (SSP) rules now mean that small and medium businesses can reclaim SSP paid out for sickness absence due to the current COVID-19 outbreak. The scheme will cover up to 2 weeks’ of sick pay per employee, provided they were off due to coronavirus, and is available to all employers with up to 250 employees.
Business rates holiday
A business rates holiday for businesses in England in the hospitality, retail, and leisure sectors is also included in the package. This means restaurants, cafes, shops, hotels, and other similar businesses will pay no business rates for the 2020-2021 financial year.
The number of changes currently being enacted at once has made small business accounting considerably more complicated; if you’re in need of help to ensure you’re taking advantage of all the benefits available to you as a sole trader or small business owner in the UK during the coronavirus outbreak, then please don’t hesitate to get in touch with us.