Government grants for small and self-employed businesses
There is no question that the last six months have been difficult for us all.
Workers across every profession have felt the pressure as lockdown was enforced, demand saw a drop and business models were adapted.
The government has responded to the pandemic by creating a number of schemes to support the UK workforce, most famously the Coronavirus job retention scheme, which had seen the amount of funding requests standing at almost £40bn at the end of September.
But what of the smaller businesses? The self-employed? The freelancers, the contractors, those that do not fall into the category of employee? There are a few options.
The Small Business Grant Fund (SBGF) supports small and rural businesses in England with their business costs during coronavirus.
It is open to small businesses that pay small or no business rates and means they are entitled to a one-off cash grant of £10,000 from their local council. You are eligible if you were based in England, occupy property and were eligible for or rural rate relief on 11 March 2020.
In addition to the above, there is also the Self Employment Income Support Scheme (SEISS).
This is made up of a series of grants, designed to support self-employed people whose business has been adversely affected by coronavirus.
The first grant paid 80% of a company’s profits over the last three years, capped at £7,500. The claims deadline for this grant was 13 July 2020. The second grant is paying 70% so is capped at £6,570. Applications close soon, on 19 October 2020.
Last month, the government announced that it would be extending the scheme by two more grants, which are, however are at a hugely reduced level. The first, from November 2020 through to January 2021, covers 20% of average monthly trading profits. Paid in a single instalment covering three months’ worth of profits, it is capped at £1,875. The final grant is for February 2021 to April 2021, but the government hasn’t yet announced what level this will be.
Only those currently eligible for SEISS will be able to apply for the extension: in a nutshell, your profits need to be lower than £50k per year and you need to make over half of your income through self- employment. Income Tax and NI will still be owed, however the grant itself is not a loan therefore does not need to be paid back.
There is a wealth of other options that you may not have considered, including mortgage holidays, loans and tax breaks. Their suitability will depend on your business structure, income and plans.
Further information on all the government support open to businesses through COVID is available here.
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