Coronavirus: Support for self-employed and small businesses during the pandemic

Support for the self-employed through the Coronavirus pandemic

The current crisis has brought on a wave of new challenges for many self-employed people and small businesses. Here’s a rundown of what financial aid is available for small businesses and self-employed workers during coronavirus.

Information accurate as per guidelines as of 06 October 2020

Self-employment Income Support Scheme

If you are currently self-employed and have lost out on earnings because of the coronavirus, you could claim a taxable grant worth 80% of your trading profits (capped at £2,500 per month). Applications for the first grant opened on 13th May 2020, and closed on 13th July 2020.

If you missed out on the first grant, don't worry - the government extended the Self-employment Income Support Scheme and applications for the second grant opened on Monday 17th August. Here's what you need to know:

  • As with the first grant, it will be taxable and paid in one instalment.
  • You do not have to have claimed the first grant to claim the second grant
  • The second grant will cover June, July and August, be based on 70% of your average monthly profit and be capped at the slightly lower amount of £2,190 per month
  • You will need to confirm that your business has been adversely affected by Coronavirus on or after 14th July 2020
  • It's worth noting that you are allowed to continue working, even if you claim the grant.

There will also be a third grant (covering the period November 2020 to January 2021) and a fourth grant (from February 2021 to April 2021). Applications are not yet open for these grants.

Who’s eligible?

Anyone who is self-employed or part of a partnership who has:

  • Traded in the last tax year (2019-2020)
  • Submitted a Self-Assessment tax return (tax year 2018-2019)
  • Faced a loss of income because of the pandemic
  • An intention to continue trading after the coronavirus has settled

Your trading profits should not exceed £50,000 and should be more than half your total income during the 2018-2019 tax year or the average of any previous tax years.

How to apply

Claims must be made on the GOV.UK website. HMRC should have contacted you if you are eligible to make a claim (but be careful of scammers who are posing as HMRC), however an eligibility tool is live for you to check whether you can receive a grant.

Claims for the second grant must be made on or before 19th October 2020. If your claim is approved, you should receive payment within 6 working days.

Coronavirus Business Interruption Loan Scheme (CBILS)

If you run a small business, you could get access to a number of loans, overdrafts and finances to support your company’s loss of revenue or disrupted cashflow during these uncertain times. The CBILS is backed by the British Business Bank, with currently over 40 lenders offering to provide finance up to £5 million to eligible borrowers.

Who’s eligible?

Your company can apply for the loan scheme if you:

  • Are a UK-based business
  • Have an annual turnover of £45million or less
  • Only require up to £5million in finance
  • Can prove your business has been impacted by the coronavirus.

However, keep in mind that the lender has the final say in whether to offer you finance.

How to apply

You’ll need to apply directly with the available lender, usually through their website or over the phone. They’ll then review your proposal and decide to offer you finance or not. If you are turned down, you can still apply through a different lender.

See the list of accredited lenders for this scheme, or visit the GOV.UK website.

Coronavirus Job Retention Scheme

Employers are being offered the option to receive government funding so they can furlough employees on 80% of their wages (up to £2,500 per month). This also includes National Insurance and Pension payments. This scheme is in place from the 1st March for the next four months but may be extended further.

Who’s eligible?

All employers are eligible to claim as long as you have:

  • A PAYE payroll scheme in place
  • Registered for PAYE online
  • A UK bank account
  • A mutual agreement between you and your employees that they are a ‘furloughed worker’.

How to apply

The window for claiming 80% of your employee’s wages opened on the 20th of April. To make a claim, make sure you have all the relevant details to hand, including employees’ National Insurance numbers and your employer PAYE scheme reference number. With this in place, you can process your claim via the GOV.UK website. The government have also producted a simple step-by-step guide.

Other supportive measures

Statutory Sick Pay refund

Small businesses with fewer than 250 employees will receive a full refund for each employee off sick with coronavirus. This covers two weeks’ statutory sick pay after the 13th March.

To find out how to make a claim, visit the government website.

If you are ineligible for Statutory Sick Pay because you are self-employed, the Government is making it easier to claim for Universal Credit or Contributory Employment and Support Allowance during the COVID-19 outbreak.

Tax & VAT deferrals

VAT payments due on March 20th and June 30th can be deferred to April 2021. This is available to all businesses, with no application required.

For anyone who’s self-employed, Self Assessment tax payments due on the 31st July can be deferred until 31st January 2021. However, you can choose to still pay this any time before the cut-off date.

If you’re struggling to pay any other business or self-employed taxes, get in touch with the HMRC’s Coronavirus (COVID-19) helpline.

Business rates relief

The government has released a business rates holiday for all retail, hospitality, nursery, and leisure establishments. This means if your business falls into one of these industries, you will have 0% business rates for the 2020-2021 tax year.

If your business does not fall into this category, you can apply for a discount through your local authority. More details are available on GOV.UK.

Business grants

On top of a business rates holiday, the government have also announced two grant funding schemes. These include:

  • Small Business Grant Fund (£10,000 one-off grant) – Available to small businesses who were eligible for the Small Business Rate Relief or Rural Rate Relief schemes on 11th March.
  • Retail, Hospitality and Leisure Grant Fund (£25,000 one-off grant) – Available to business in these industries who were eligible for a discount under the Expanded Retail Discount Scheme and had a rateable value of less than £51,000.

See for more information.