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Progress: There’s a raft of schemes that businesses can apply for to help them navigate Covid-19

WITH local lockdowns in various parts of the country, and a difficult winter ahead, businesses will need all the help they can get to keep going. Rishi Sunak’s most recent Winter Plan came up with some extra help with new schemes and extensions to existing ones. But it can be hard to keep on top of what’s available in what seems to be a constantly changing world.

Mike Cherry, chair of the Federation Of Small Business (FSB) says that the recent changes and extensions to the grants are a ‘significant step forward’ but added that more help is needed.

Here are some schemes you should know about, and how they could help your business.

Coronavirus Business Interruption Loan Scheme

If you can’t trade or are struggling because of coronavirus, you can apply for the Coronavirus Business Interruption Loan Scheme (CBILS). This provides loans up to £5million.

The loans are interest-free for the first year and medium-sized businesses with a turnover of up to £45million can apply for a CBILS loan directly from one of over 60 lenders or use a business loans broker. Businesses now have until the end of November to apply for these loans, as the Government has recently extended the scheme. Further information is available on the British Business Bank website (british-business-bank.co.uk).

Bounce Back Loans

For smaller businesses, especially those looking for a less complex application process, Bounce Back Loans (BBLS) offer between £2,000 and £30,000, repayable over six years. For the first year the loans are interest-free as the interest is covered by the Government. Loans were initially repayable over six years and this has now been extended to ten. There is more information on these loans on the British Business Bank website.

Future Fund

For companies that do not have revenue or profit yet, and are therefore unable to access BBLs or CBILS, the Future Fund offers between £125,000 and £5million, subject to at least equal match funding from private investors. Applications for the fund will also be extended until the end of November and there is more information at uk-futurefund.co.uk.

Coronavirus Jobs Support Scheme

When furlough ends at the end of October, it will be replaced by the Jobs Support Scheme, which is less generous but runs for a further six months. Instead of paying employees to be off completely, it will pay only a percentage of the wages of employees who are working at least a third of their normal hours, while employers must also share the cost of those unworked hours and pay national insurance and pension contributions.

Your employees must be working at least a third of their normal hours to benefit, and there is a similar cap to the furlough scheme. There’s more detail at gov.uk/government/publications/job-support-scheme.

Jobs Retention Bonus

The new Jobs Support Scheme is also compatible with the Jobs Retention Bonus scheme. Under this scheme, employers who keep their previously furloughed employees in meaningful employment continuously until January 31 will receive £1,000 per employee.

Eligible employees must earn at least £520 a month on average between November 1, 2020 and January 31, 2021. Employers will be able to claim the Job Retention Bonus after they have filed PAYE for January and payments will be made to employers from February 2021.

VAT Payment Deferral

Companies were able to defer VAT payments between March and June. Although this is no longer an option, companies that are struggling to pay the outstanding bill can now make smaller payments up to the end of March 2022, interest-free, instead of paying it all by March 2021.

You will need to opt in to the scheme. If you do, your VAT liabilities due between March 20 and June 30 2020 do not need to be paid in full until the end of March 2022.

VAT reduction

VAT registered businesses in the hospitality, accommodation and attractions industries are benefitting from a reduced VAT rate, down from 20 per cent to five per cent. This reduction has now been extended until March 2021.

There’s more information about how to deal with it at gov.uk/guidance/vat-reduced-rate-for-hospitality-holiday-accommodation-and-attractions.

Help with deferring your tax bill

Taxpayers who make a ‘payment on account’ towards next year’s tax bill were allowed to defer their July 31 payment this year. While this payment would have become due in January 2021. The Chancellor has now announced that this can be spread over 11 monthly instalments. However, customers will have to pay interest on deferred payments.

There’s more detail on how to defer the payments at gov.uk/government/news/self-assessment-customers- to-benefit-from-enhanced-payment-plans.

Sarah Coles at Hargreaves Lansdown says the interest charge is ‘a kick in the teeth for the self-employed’. She adds: ‘For those who take advantage of the initiative, it will still make a difference to their ability to keep on top of their tax debts. At this stage, they need all the support they can get,’ she says.

Small Business Grant Fund (England Only)

Small and rural businesses benefit from a one-off £10,000 payment from their council if the business is based in England, occupies property and was eligible for small business rate relief or rural rate tax relief on March 11 2020.

To claim a SBGF payment you do not need to take any action — if you’re an eligible business, your local council should contact you and provide details of how to claim.

Local Lockdown Grants

Small businesses that are required to shut due to local lockdowns will receive local lockdown grants. To be eligible for the grant, a business must have been required to close due to local Covid-19 restrictions.

The largest businesses will receive £1,500 every three weeks they are required to close, while smaller businesses will receive £1,000. The payments are triggered by a national decision to close businesses in a high incidence area.

The Kickstart Scheme

This gives funding to employers to create new jobs for those on Universal Credit. Government funding covers 100 per cent of the relevant National Minimum Wage for 25 hours a week for the employee, the associated employer national insurance contributions and employer minimum automatic enrolment contributions. Smaller businesses will need to join together in a group to be part of the scheme and there’s information on how to do that at gov.uk/guidance.

And there’s more support available…

Small businesses that are struggling can find other help that isn’t specifically coronavirus related too.

Try gov.uk/business-finance-support for details of grants for businesses in specific areas of the country or specific sectors. For example, there are currently innovation vouchers available for businesses in Bournemouth and grants for climate change projects in the West Midlands. Small businesses in the early stages are also eligible for start up loans from the government of up to £25,000. There’s more about these at startuploans.co.uk.

There are also commercial loans available — although these are likely to be more expensive than the government schemes.

Small business accountant Cheryl Sharp, from Pink Pig Financials, recommends looking at Iwoca and Swoop. She says: ‘Swoop’s website has an easy online application portal, which matches your requirements to the best lenders and investors.

‘Iwoca has some flexi loans, which could be helpful.’ Iwoca also offers the government’s CBILS loans. For more information, visit swoopfunding.com and iwoca.co.uk

‘It was a hoo-ha to apply but the extra money got us through’

JULIE WADDELL is the founder of Moorish (lovemoorish.co.uk), which provides humous to supermarkets and to the hospitality industry.

When coronavirus hit, she wasn’t sure what was going to happen to her business, and decided she would need extra finance.

‘As well as the supermarket business, I used to provide a snack pack to British Airways with humous and crackers,’ she explains. ‘Obviously that went.’

Julie, applied for a CBILS (Coronavirus Business Interruption Loan Scheme) loan from her bankers at Barclays. ‘It was a very protracted process and a bit of a hoo-ha,’ she says. Although she didn’t get all of the money she needed, she says it was enough to get the business through and was received within six to eight weeks.

Julie later took out a second CBILS loan, which she says was a far quicker process.

The first loan has a 60-month term and the other has a term of 36 months. In both cases the first year is interest-free. Julie says she hopes to pay the money back before the interest-free period ends. ‘We’ve refocused the business on healthy at-home snacking, which is what people want because they aren’t going to coffee shops,’ she says.

The company has just launched a chocolate humous as a healthy alternative to Nutella for children, which Julie says ‘tastes like cake batter’. It is stocked in Sainsbury’s.

‘The small business grant has helped us brid ge the in come gap’

TAYLOR GIACOMA is a musician and runs Semitone Studios (semitonestudios.com), which is a music studio, music venue and café in Marple, Stockport, a local lockdown area.

‘We have closed the venue due to coronavirus but lessons have continued online,’ she says.

Taylor received the £10,000 Small Business Grant from the Government, payable to businesses that received small business rate relief.

‘This has helped us to bridge the income gap for the business,’ she says.

‘I don’t think the Government has done enough for our industry — it’s really hard for musicians and those in the arts at the moment,’ she says. ‘However, they’ve not done nothing, and schemes like this have really helped.’

Semitone Studios is using the time while it is shut to refurbish a second studio space on the property. However, Taylor says she is not thinking about reopening until there is effective treatment or a vaccine. ‘We did think about reopening in August when things seemed to be dying down, but we are surviving online so it seems silly to put anyone at risk — we are serving quite a lot of people as it is.’