COVID-19 business support for third lockdown

As we head into a national lockdown for a third time from 5 January, businesses need to be prepared with flexible financial management. With so many changes to keep an eye on, business specialist Jack Moore sums up the government schemes available for owners of limited companies and the self-employed, while looking at ways your accountant can help you through tougher restrictions.

On 4 January, it was announced by Prime Minister Boris Johnson that the UK would go into a national lockdown. Despite us all hoping for a COVID-free 2021, it looks as though many businesses are remaining closed in an effort to reduce the impact that the pandemic is having on the country. Your accountant can help with government support schemes and financial plans to reduce the economic impact to you or your business, whether you're self-employed, a charity or a large corporation.

COVID-19 Support Schemes

The past year has shown that accuracy is key when applying for government grants and support schemes. Many businesses made calculation errors in their support claims which resulted in them needing to make repayments of the overclaimed grants further down the line. At Page Kirk, our team closely monitor the small print of these schemes so that you don't have to. That way, you can be sure that you're receiving the maximum support you're eligible for and won't be receiving any unwelcome letters asking for you to repay part of the grant you received.

Job Retention Scheme (Furlough Scheme)

If you use a PAYE scheme for paying your employees, you will be able to access JRS support in order to keep paying your employees even if regular business has slowed down or dropped off completely. The government will pay a grant of 80% of an employee's wage up to £2,500 per month, per individual, for those who you are unable to keep in work. Employees will need to be designated as 'furloughed' in order to receive the grant, which requires making an application to HMRC.

Coronavirus Business Interruption Loan (CBILS)/Bounce Back Loan (BBLS)

These are flexible loans available for businesses who are experiencing short-term cash flow issues due to COVID-19. They are available through most major banks and require an application and supporting evidence.

The CBILS scheme helps small and medium-sized businesses to access loans and other kinds of finance up to £5 million. The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months. For a business to be eligible it must be based in the UK and have annual turnover up to £45m.

The BBLS scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000. 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. For a business to be eligible it must be an SME based in the UK, have been established before 1 March 2020 and have been adversely affected by the coronavirus crisis.

Pay As You Grow

This scheme offers a flexible solution to paying back the Coronavirus Business Interruption and Bounce Back Loans. We can help with setting up these payments in order to smooth your business' cash flow.

Statutory Sick Pay Support

This is a scheme designed for employers to claim back an employee's coronavirus-related Statutory Sick Pay (SSP).

Tax Deferrals – Time to Pay

Whether it is deferrals for self-assessments or VAT, or support if you are unable to pay your corporation tax bill on time, we can help you and your business build a case for applying to use the 'Time to Pay' scheme. This is intended to help struggling businesses by agreeing a payment arrangement for their taxes which cannot be paid on time.

Self-Employment Income Support Scheme (SEISS)

Here, we have a grant which helps to support self-employed people who have been adversely affected by the coronavirus. Similar to the Job Retention Scheme, SEISS will provide 80% of profits up to a cap of £2,500 per month. HMRC will calculate your average profits from your tax returns in 2016-17, 2017-18 and 2018-19, in order to decide how much you are eligible for.

More Time to File Company Accounts

Usually there are penalties for the late filing of company accounts. However, with the year being so turbulent, the Government have extended company accounts filing deadlines by 3 months – check Companies House to confirm that your company's filing date has been extended.

Additional Restrictions Grant

This grant is designed to help businesses that do not pay business rates, or those that have not been forced to close, but which are still impacted by the restrictions put in place.

Extra support

The chancellor Rishi Sunak announced on 5 January a £4.6bn fresh support package for struggling UK companies in the form of top up grants which retail, hospitality and leisure companies can claim up to £9,000 each with a new £594m fund being made available for councils to support other businesses which are not eligible for those grants.

Keeping you informed

The past year has proven that businesses and the self-employed need flexible and precise support from their accountants. Page Kirk are on hand to gather evidence to support applications, access government schemes and strategically implement furloughing in a way that causes the minimum disruption to you and your business.

We are on hand to support you through this difficult time. If you would like any advice or information on anything mentioned in this blog, please do not hesitate to contact us on 0115 955 5500 or email enquiries@pagekirk.co.uk.