Global corporations closing down indefinitely, people panic buying everything they can find in supermarkets and self-isolation for everyone in Britain – it is clear that Covid-19 has completely transformed the way the world works.
This is scary for everyone, but it is particularly concerning for small business owners who don’t know how to respond. Should they keep their business open, or shut down? Do they need to pay sick pay for employees themselves, or will the government cover it? What if you are a sole trader?
If you are a small business owner it is likely you are asking yourself these questions, and you are probably feeling very overwhelmed. Thankfully we are here to help; here are a few things all small business owners should know about during the Covid-19 pandemic.
Government Help For Small Business Owners During Covid-19
The government has recently released a budget statement to help small businesses during this tumultuous time. They have put a number of measures in place, including support for business owners who need to pay sick pay and a business rates holiday.
Here are the measures currently in place to support small business owners:
- 12 month business rates holiday for all businesses in hospitality, leisure and retail.
- Statutory sick pay for full and part time employees who work for small and medium sized enterprises.
- £10,000 grants for all small businesses that qualify for rural rate relief or business rate relief.
- £25,000 grants for any hospitality, leisure and retail businesses that currently have a ratable value that is between £15,000 and £51,000.
- Tax relief through the HRMC ‘Time To Pay’ Scheme.
- VAT deferrals until the end of June.
- Grants to pay up to 80% of the wages of employees who still work for small businesses.
You can find out more about these measures on the official GOV website.
Getting A Business Loan During Covid-19
Many business owners are worried that they won’t be able to take out a loan for the next few months, but this shouldn’t be the base. A Coronavirus Business Interruption Loan Scheme has been put in place to encourage loan providers to carry on lending to small business owners during the pandemic, and so far around 40 business lenders have agreed to this. You can find out which lenders will loan to you by checking out the British Business Bank.
Covid-19 Helpline For VAT and Tax
There is also a Covid-19 helpline for small business owners who are worried about VAT and tax. You can ring this helpline on 0800 0159 559, and an operator will talk to you about Time to Pay support. There is also a tax deferral scheme that means business owners don’t need to pay any VAT until June.
The Business Rates Holiday
Finally there is a business rates holiday for all hospitality, leisure and retail businesses for the 2020-2021 tax year.
Information For Sole Traders
Are you a sole trader who has had to self-isolate and stop trading? If so, don’t assume that the new sick pay regulations apply to you, as the government haven’t released a statement for sole traders yet. This is understandably a little stressful, but there should be an announcement about this in the coming weeks.
This is a scary time for most business owners in the UK, but it is important to stay strong. Remember you are not alone; millions of other businesses are going through this too, and the sooner everyone self-isolates, the sooner everything can go back to normal!
Update 4.3.20: Information for Self Employed
You can Claim a grant through the coronavirus (COVID-19) Self-employment Income Support Scheme if you’re a self-employed individual or a member of a partnership and you:
- have submitted your Income Tax Self Assessment tax return for the tax year 2018-19
- traded in the tax year 2019-20
- are trading when you apply, or would be except for COVID-19
- intend to continue to trade in the tax year 2020-21
- have lost trading/partnership trading profits due to COVID-19
Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment.