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Help for SMBs and the self-employed during COVID-19

Ash Baggott

It goes without saying that Covid-19 (Coronavirus) is and will forever be remembered as a global emergency. Not only has it directly affected hundreds of thousands of people in over 200 countries, it has also had a staggering impact on the global economy. And unfortunately, it is SME’s and entrepreneurs who tend to feel the effects the most.

SME’s know better than anyone that the world is unpredictable and that you have to be flexible, but the challenges that accompany COVID-19 are very specific. This is why the British government has announced support measures for businesses, employees and the self-employed. Here is the most recent information we have about the plans and measures available.

Financial support available for businesses during coronavirus

We’ve gone through the support available for SMBs and freelancers during COVID-19. See what’s available for you to help you through these uncertain times.

Self-Employment Income Support Scheme (SEISS)

This scheme will allow you to apply for a taxable grant representing 80% of your business profits, up to a maximum of £ 2,500 per month for the next three months. This scheme can be extended if necessary.

Who can apply? 

You can apply if you or your partner are self-employed, and you;

  • have submitted your income tax return for the 2018-19 tax year
  • negotiated during the 2019-20 fiscal year
  • are in business when you apply, or would be in business when you apply, with the exception of COVID-19
  • Intend to continue trading in fiscal year 2020-21
  • have lost profits from exchanges or partnerships due to COVID-19

Your self-employed business income must also be less than £50,000, and more than half of your business revenue must come from self-employment, or freelance work. This is determined by the fulfillment of at least one of the following conditions:

  • have commercial profits / commercial partnership profits in 2018-19 of less than £50,000, and these profits constitute more than half of your total taxable income
  • have average business profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits make up more than half of your average taxable income in the same period

If you started trading between 2016 and 2019, the HMRC will only use the years for which you have completed a self-assessment tax return. If you have not submitted your income tax return for the 2018-19 fiscal year, you must do so before April 23, 2020.

The HMRC will use the data relating to 2018-19 declarations already submitted to identify eligible persons, and will assess late declarations filed before the deadline of 23 April 2020 in the usual way.

How much will you get?

You will obtain a taxable subsidy which will be equal to 80% of the average profits of the fiscal years (if applicable):

  • 2016 to 2017
  • 2017 to 2018
  • 2018 to 2019

To calculate the average, the HMRC will add up the total business profits for the three fiscal years (if applicable), then divide by three (if applicable) and use this result to calculate a monthly amount. It will be capped at £ 2,500 per month for 3 months. If approved, the grant will be paid directly into your bank account, in one single payment.

How to Apply

You cannot yet apply for this plan. The HMRC will contact you in case you are eligible for the scheme and invite you to make your application online.

Individuals don’t have to contact the HMRC now and because this will delay the urgent work undertaken by their team to introduce the scheme. You will not have access to this through GOV.UK.

If someone sends you texts, calls or emails claiming to be from the HMRC, telling you that you can apply for financial assistance or that you owe a tax refund, and asking you to click on a link or provide information such as your name, credit card or bank details, this is a scam.

After your application

Once the HMRC has determined that you are entitled to the grant, you will be contacted by their team to tell you the amount you will receive and the payment terms.

If you are claiming tax credits, you will need to include the grant in your claim as income.

COVID-19 Job Retention Scheme

What does it do?

Under the Coronavirus Job Retention Scheme, all UK employers will be able to get help to continue paying part of their employees’ wages for employees who would otherwise have been laid off during this crisis.

Who and what is eligible?

All UK employers with a PAYE scheme created and implemented by 28 February 2020 will be eligible – this includes companies, charities, recruitment agencies (temporary workers paid by PAYE) and public authorities.

The employer must have a UK bank account (the HMRC will pay through BACS payment).

The HMRC will pay employers a subsidy representing 80% of an employee’s usual salary cost, up to a maximum of £ 2,500 per month, plus employer contributions to national insurance and minimum employer pension contributions will automatically be registered on this subsidised salary. This is to prevent workers from being made redundant.

It covers the cost of salaries retroactive to March 1 and is initially available for 3 months, but this may be extended if necessary. This applies to employees who have been asked to stop working but who are kept on the payroll, in other words “workers on leave”.

Employees who are on leave must have been entered on your payroll by February 28, 2020 and may be on any type of work contract, including: full-time employees, part-time employees, workers on contract agency, employees on fixed-term or open-ended contracts. 

Note: you will need to calculate the amount you are requesting. The HMRC reserves the right to retrospectively check all aspects of your request.

How to get there?

The HMRC is working urgently to set up a reimbursement system. The first grants are set to be paid in the coming weeks.

You will need to:

  • Designate the employees concerned as “workers on leave” and inform your employees of this change – the change in the status of employee’s remains subject to applicable labor law and, depending on the employment or work contract, may be subject to more negotiations.
  • Once the new online portal is up and running, submit to the HMRC information on the employees who have been laid off and their earnings.

What you will need to make a claim:

Employers must discuss with their staff and make any changes to the employment contract by agreement. Employers may need to seek legal advice on the procedure. If there are enough staff, it may be necessary to initiate collective consultation processes to obtain agreement on changes to the terms and conditions of employment.

To claim it, you will need:

  • Your ePAYE reference number
  • Number of employees laid off
  • The request period (start and end date)
  • Amount requested (per minimum layoff period of 3 weeks)
  • Your bank account number and sort code
  • Your contact name
  • Your phone number

Coronavirus (COVID-19) Small Business Grant Fund (SBGF) of £10,000

Who is eligible for the grant?

Your property must have been occupied and have benefited from a tariff reduction for small businesses at full or declining rates, as defined on Gov.uk on March 11, 2020. You will be entitled to one grant for each property.

Retail, Hospitality and Leisure Grant (RHLG) of £ 10,000 or £ 25,000

To be eligible for this grant, your property must have the following characteristics:

  • was occupied on March 11, 2020
  • a taxable value of less than 51,000
  • were able to benefit from a reduction under the corporate discount scheme (Epanded Retail Discount Scheme)  if this scheme had been in force on that date

You will be entitled to a grant per property and will be paid the following amount:

  • £10,000 if your property has a maximum assessed value of 15,000
  • £25,000 if your assessed value is more than £ 15,000 and less than 51,000

COVID-19 Statutory Sick Pay (SSP) Relief Help

What does it do?

This help allows small and medium-sized businesses and employers to recover statutory sickness benefit (SSP) paid for sick leave due to COVID-19.

Who and what is eligible?

This reimbursement will cover up to 2 weeks of SSP per eligible employee who has been off work due to COVID19. Employers who hired less than 250 employees will be eligible – the size of an employer will be determined by the number of people employed as of February 28, 2020.

Employers will be able to recover expenses for any employee who requested the SSP (according to the new eligibility criteria) following COVID-19.

Employers are required to keep records of staff absences and SSP payments, but employees will not be required to provide a qualification note (GP fit note). If an employer requires evidence, people with symptoms of coronavirus can get a proficiency score online from the NHS 111 website, and those living with someone with symptoms can get a rating from the NHS website.

The period of eligibility for the scheme will start on the day following the entry into force or commencement of the regulations on the extension of the SSP to those who stay at home. The government will work with employers in the coming months to put in place the employer reimbursement mechanism as soon as possible.

How to get there?

The British government is currently developing a rebate system. More information will be provided in due course. If you are self-employed and want to know if you are eligible for universal credit, click here: Government of the United Kingdom – Self employment and universal credit

COVID-19 SMBs help through deferring Self-Assessment payments 

If you have to make a self-assessment deposit before July 31, 2020, but the impact of the coronavirus prevents you from making the payment on this date, you can postpone the payment until January 2021.


You are eligible if you have to pay your second self-assessment deposit on July 31. You do not have to be self-employed to benefit from this deferral. Adjournment is optional. If you are still able to pay your second installment on July 31, you must do so.

How to access the program

This is an automatic offer, without the need to make a request. No late payment penalty or interest will be charged if you defer payment until January 31, 2021.

During the deferral period, you can set up a budget payment plan to help you pay the deferred deposit when it is due. If you are in temporary financial difficulty because of Covid-19, you can receive extra help from HMRC.

Business Rates (all businesses)

What does it do?

This offers businesses a relief on their rates to help them survive COVID-19 without the stress of the normal, existing rates.

Who and what is eligible?

All non-domestic properties in Scotland will benefit from a reduction of 1.6%. 

How to get there?

You do not need to apply for this exemption/relief – it will be applied to your bill by the council.

Business Rates holiday 

Who and what is eligible?

Retail, hotel and leisure businesses will benefit from a 100% reduction in their rates. To get this help, you have to occupy a property. Properties that have closed temporarily due to COVID-19 government advice will be treated as occupied properties.

Scottish airports will benefit from a 100% (hundred percent) rates relief for one year, as will organisations that provide assistance services for scheduled passenger flights to Scottish airports. Due to the unique role Loganair plays in connectivity to the Highlands and the Islands, they will also benefit from a 100% (hundred percent) rate relief for one year. No other airline will benefit from a fare reduction in Scotland.

Any organization providing a “help desk” at Scottish airports is eligible. Support services are defined as services that do at least one of the following:

  • Defrost (De-icing)
  • Re-fuelling
  • Moving aircrafts
  • Waste servicing
  • Allocation of seating
  • Handling of baggage
  • Supervision of boarding

How to get there?

You do not need to apply for this exemption, relief – it will be applied to your bill by the council.

Coronavirus Business Interruption Loan Scheme 

What does it do?

This temporary loan program will help SMEs access loans, overdrafts, bill financing and asset financing of up to £5million, for up to 6 years.

Who and what is eligible?

Supports loans up to £5million, and are available with repayment terms of up to six years.

The UK government will provide lenders with a partial guarantee of 80% on each loan (subject to an overall limit per lender). There will be no guarantee fee for SME’s access to the scheme, however, lenders will pay a fee for accessing the scheme.

Interest and fees are paid by the UK government for 12 months – this means that there are no upfront fees and that the initial refunds are lower for SMEs.

For overdrafts and bill/invoice financing facilities, the duration will be three years maximum. Your business must be based in the UK and its turnover should not exceed £45million per year. Your business must meet the other eligibility criteria explained in the British Business Bank website – eligibility criteria.

How to get there?

This program is now open to applications. There are 40 licensed lenders who can offer this program, including all of the major banks.

To apply, contact your bank or one of the approved financing organisations as soon as possible to discuss your business plan. You will find the latest information on the best way to contact them on their websites. Please note that branches may currently be closed due to social distancing measures.

COVID-19 Corporate Financing Facility (CCFF)

As part of the new coronavirus (COVID-19) corporate finance facility, the Bank of England will purchase short-term debt from larger companies.

This will support your business if it has been affected by a shortage of short-term funds and will finance your short-term liabilities. It will also support the financial markets of businesses in general and facilitate the supply of credit to all businesses.


Companies – and their financial subsidiaries – that make a significant contribution to the UK economy can participate in this scheme. Businesses must do this through a bank.

In practice, companies which fulfill this condition are normally;

  • Companies under British law, including those whose parents are of foreign nationality and which have a genuine activity in the United Kingdom; companies that employ a significant number of people in the UK.
  • Companies headquartered in the UK.  Firms that generate important income within the UK, whether or not it serves a lot of clients in the UK or whether or not it has a superb variety of working sites in the UK.

The scheme is open to companies that can demonstrate that they were in good financial health before the virus, which will help examine the temporary impacts of the virus itself on companies’ balance sheets and cash flows. These are companies that had a short or long-term investment quality rating, as of March 1, 2020, or equivalent.

To discuss eligibility, you can contact CCFFeligibleissuers@bankofengland.gsi.gov.uk.

How to access the program

If, after talking together with your financial institution, and you suppose you meet the eligibility criteria, you have to finish/complete the next documents beneath.

  • Issuer Eligibility Form
  • Issuer Commitment and Confidentiality Agreement

More information on the program, frequently asked questions and how to apply is available on the BoE website.

HMRC’s Time to Pay service

What does it do?

A Time to Pay Arrangement with HMRC is a debt repayment plan for your outstanding taxes. Companies that have defaulted on their payments to settle their Corporation Tax, VAT and/or PAYE can ask HMRC for extra time to pay.  They will usually agree that you can pay it back over 6-12 months.

Who and what is eligible?

All businesses and all self-employed in financial difficulty and having tax delinquent debts or outstanding tax liabilities can receive support for their tax affairs through the Service Time To Pay of the HMRC.

These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and responsibilities.

How to get there?

Call the HMRC hotline at 0800 0159 599.

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