The government are continuing to support businesses and individuals as we ease out of coronavirus restrictions by implementing new loan schemes as well as adapting the support schemes currently in place.
Self-Employed Income Support Scheme
The 5th Self Employed Income Support Scheme (SEISS) grant has been confirmed and will relate to the period from May 2021 to September 2021. The claims window is expected to open in late July.
The grant will pay either 80% or 30% of 3 months averaged trading profits depending on the reduction of turnover for the business.
HMRC are yet to issue official guidance but more details on the 5th grant can be found on our news page.
Recovery Loan Scheme (RLS)
The government have backed a loan scheme which is designed to help businesses recover from coronavirus by helping them to access financial support such as loans or other finance options.
This loan scheme allows each business to benefit from up to £10 million as either:
- Term loans or overdrafts for a maximum term of 3 years
- Invoice or asset finance for a maximum term of 6 years
The amount offered to each business is at the discretion of each lender and for amounts up to £250,000 no personal guarantee will be taken. However, if you are borrowing over £250,000 and the lender requires a personal guarantee this cannot be held over the taxpayer’s home.
Under the RLS the government will guarantee 80% of the finance however, as a borrower the taxpayer will always be 100% liable for the debt.
In order to be eligible for the loan scheme, a taxpayer must be trading in the UK and not operate in certain excluded sectors. These sectors include banks, building societies, insurers or reinsurers, public sector bodies and state-funded schools.
The taxpayer must also be able to show that the business:
- Has been adversely affected by coronavirus
- Would have been viable for the loan if it were not for coronavirus
- Not in collective insolvency proceedings
The RLS will still be available if the taxpayerhas already borrowed under previous coronavirus guaranteed loan schemes, however, the existence of previous loans may limit the amount that can be borrowed under the RLS.
This scheme opened on 6 April 2021 and will run until 31 December 2021.
The loan can be taken out through an accredited lender, a list of which can be found on the British Business Banks website.
Coronavirus Job Retention Scheme (CJRS)
The CJRS has been one of the main government support schemes for businesses and employees throughout the pandemic, and will remain in place until September 2021. However, from July 2021, the government will be gradually reducing the amount of CJRS contributions payable to businesses over the next few months as restrictions are eased.
The current system enables employers to receive a government contribution of 80% of furloughed employees’ pay, up to a maximum of £2,500 per employee per month. The employer will only need to pay for hours that the employee has worked as well as their National Insurance and pension contributions.
From July the scheme will change, meaning that the government will only contribute 70% of an employee’s furlough pay up to a maximum of £2,187.50 per month with the employer paying the remaining 10% of an employee’s furlough hours.
For August and September, the government will reduce their contribution further to 60% of an employee’s furlough pay up to a maximum of £1,875 with the employer paying the remaining 20% of an employee’s furlough hours.
The employer will continue to pay the employee’s worked hours, National Insurance and pension contributions.
Coronavirus Restart Grant
For businesses in the non-essential retail, leisure, hospitality, personal care, and accommodation sectors the government have implemented the Restart Grant scheme to help business to reopen as restrictions start to ease.
To be eligible for the restart grant the business must:
- Be based in England
- Be in one of the eligible sectors
- Have been trading on 1 April 2021
- Pay rates
- Not be in administration, insolvency or be struck off
- Not exceed the permitted subsidy allowance (details of this can be found on the government website)
The grants will be issued by the local council and will vary depending on a business’s rateable value.
For businesses in the non-essential retail sector, to the grant could be up to £6,000.
For businesses in all other eligible sectors, grants up to £18,000 may be available.
Applications must be made through the local council and more details can be found on their website.
If you have any questions, please get in touch with your usual Newby Castleman LLP contact.