Covid 19 Business Support

Companies across the UK are dealing with unparalleled challenges as the enforced closure of premises and strict social distancing measures slam the brakes on business as we know it in the wake of the escalating coronavirus crisis. At H& Associates we have all the tools and knowledge to help companies at this time.

Emergency Funding

Economic Support:

Extension of Government Loan Scheme: The March 2024 budget extended the COVID-19-era government loan scheme for small businesses until 2026, providing financial assistance to businesses impacted by the pandemic.

The UK government’s Recovery Loan Scheme (RLS) is designed to support businesses affected by the COVID-19 pandemic by providing access to finance for recovery and growth.

Key Features of the Recovery Loan Scheme:

  • Loan Amounts: Businesses can apply for loans up to £10 million.
  • Government Guarantee: The scheme offers an 80% government guarantee to lenders, encouraging them to provide financing to eligible businesses.
  • Eligibility Criteria:
    • The business must be trading in the UK.
    • It should have a turnover of £45 million or less.
    • The business needs to demonstrate viability and must not be in difficulty.
  • Previous Support: Businesses that received support under earlier COVID-19 loan schemes are eligible to access finance under the RLS, provided they meet all other eligibility criteria.
  • Application Process: Applications are made directly through accredited lenders participating in the scheme.

Cost of Living Fund: The government’s cost of living fund has been extended for a further six months from March 2024, offering support to individuals facing financial challenges due to the ongoing effects of the pandemic.

Post-SEISS Support:

Since the conclusion of SEISS, there have been no direct replacements offering similar grants to self-employed individuals. However, self-employed individuals may explore the following avenues for support:

  • Universal Credit: Self-employed individuals with low income or who are out of work may be eligible for Universal Credit, which provides financial assistance for living costs. Eligibility and payment amounts depend on individual circumstances.
  • Employment and Support Allowance (ESA): If you have a disability or health condition that affects your ability to work, you may qualify for ESA. Recent changes have been made to the benefits system, including the transition of certain legacy benefits to Universal Credit.
  • Business Support Grants and Loans: Various grants and loan schemes are available to support businesses, including those that are self-employed. These may be offered by local councils or through national programs aimed at business development and recovery.
  • Tax Reliefs and Allowances: Self-employed individuals can benefit from various tax reliefs and allowances to reduce taxable income. It’s advisable to consult with a tax professional or refer to HM Revenue and Customs (HMRC) for guidance.

The Time to Pay (TTP) service offered by HMRC is designed to support businesses and self-employed individuals who are experiencing financial difficulties and cannot pay their tax liabilities on time. This service allows eligible taxpayers to set up a payment plan to spread the cost of their outstanding tax liabilities over an agreed period.

Key Features of the Time to Pay Service

  1. Eligibility:
    • Open to businesses and self-employed individuals who:
      • Are in financial distress.
      • Have outstanding tax liabilities.
      • Can demonstrate a genuine inability to pay their tax on time.
    • Arrangements are made on a case-by-case basis.
  2. Tax Liabilities Covered:
    • Income Tax
    • VAT
    • Corporation Tax
    • PAYE (Pay As You Earn)
    • Other taxes collected by HMRC
  3. How It Works:
    • You contact HMRC before the tax payment deadline or as soon as you realize you will have difficulty paying.
    • HMRC assesses your financial situation, liabilities, and ability to pay.
    • If eligible, you can agree on a tailored repayment plan to pay the owed amount in instalments.
  4. Key Considerations:
    • You may need to provide financial information, such as cash flow forecasts or details about income and expenses.
    • Interest will usually accrue on the outstanding balance, but late payment penalties may be waived if the arrangement is agreed upon promptly.
    • Missing a payment under the agreed plan may result in the plan being canceled, and HMRC may pursue debt recovery actions.
  5. Contacting HMRC:
    • Call the Payment Support Service at 0300 200 3835 (Monday to Friday, 8 am to 6 pm) or visit HMRC’s official website.
    • If the debt is small (up to £30,000), you may be able to set up a Time to Pay arrangement online using HMRC’s self-service tool.

Advantages:

  • Avoids immediate legal action for unpaid taxes.
  • Helps manage cash flow during periods of financial hardship.
  • Demonstrates to HMRC your willingness to resolve outstanding tax debts.

If you are considering using the Time to Pay service, it is advisable to act promptly to avoid additional penalties and interest.

Post-Furlough Support:

Following the scheme’s closure, the government introduced various measures to support businesses and individuals, including:

  • Job Support Scheme (JSS): Designed to protect viable jobs in businesses facing lower demand due to COVID-19, the JSS provided financial assistance to employers to retain employees on reduced hours.
  • Training and Reskilling Programs: Initiatives aimed at helping individuals transition into new employment opportunities through skill development and training.