Self-Employment Income Support Scheme / Coronavirus Job Retention Scheme
How can businesses apply to the scheme?
- All UK businesses are eligible for the scheme. Businesses will need to designate workers as “furloughed” and submit information to HMRC, which will administer the scheme.
- The scheme went live on 20 April and will cover a period from 1 March to 30 October 2020 (with employers sharing some costs from August).
- The Government has published guidance for employers, guidance for employees, guidance on eligibility and guidance on calculating wages, as well as HM Treasury’s Directions to HMRC on the CJRS.
- We provide more detailed information in our briefing FAQs: Coronavirus Job Retention Scheme.
Self-employed individuals, including members of partnerships, are eligible if they:
- submitted their Income Tax Self-Assessment tax return for the tax year 2018-19;
- continued to trade in 2019-20 and intend to keep trading in 2020-21;
- carry on a trade which has been adversely affected by COVID-19;
- have average self-employed trading profits of no more than £50,000 and at least equal to their non-trading income.
Individuals can continue to work, start a new trade or take on other employment including voluntary work, or duties as an armed forces reservist.
Eligible individuals can claim a taxable grant worth 80 per cent of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profit, and capped at £7,500 in total. Applications for the first grant opened on 13 May 2020. Applications for the first grant will close on 13 July 2020.
Second and Final Grant
Eligible individuals can claim a taxable grant worth 70 per cent of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profit, and capped at £6,570 in total.
The eligibility criteria are the same for both grants, and individuals will need to confirm that their business has been adversely affected by coronavirus when applying for the second and final grant. An individual does not need to have claimed the first grant in order to be eligible for the second and final grant.
Applications will open in August 2020. Further information on the second grant will be available on GOV.uk on 12 June 2020.
- From 1 July, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim CJRS grant for their normal hours not worked.
- From 1 July, employers will be able to agree any working arrangements with previously furloughed employees.
- When claiming the CJRS grant for furloughed hours; employers will need to report and claim for a minimum period of a week.
- This is a minimum period and those making claims for longer periods such as those on monthly or two weekly cycles will be able to do so.
- To be eligible for the grant, employers must agree with their employee any new flexible furloughing arrangement and confirm that agreement in writing.
- Employers can claim the grant for the hours their employees are not working calculated by reference to their usual hours worked in a claim period. Further details will be included in future guidance.
- Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
- For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.
- Further guidance on flexible furloughing and how employers should calculate claims will be published on 12 June.
From August 2020, the level of the grant will be slowly tapered to reflect that people will be returning to work:
- In June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance Contributions (ER NICS) and pension contributions for the hours the employee doesn’t work. Employers will have to pay employees for the hours they work.
- In August, the government will pay 80% of wages up to a cap of £2,500 and employers will pay ER NICs and pension contributions for the hours the employee does not work.
- In September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.
- In October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.
Statutory Sick Pay Rebate Scheme
The Rebate Scheme is available to employers who had fewer than 250 employees on its PAYE scheme(s) as of 28 February 2020. Eligible employers can reclaim up to two weeks of SSP payments made to employees who were incapable of work because they:
- had symptoms of Covid-19 on or after 13 March 2020;
- had to self-isolate in accordance with public health guidelines on or after 13 March 2020;
- had to shield in accordance with public health guidelines on or after 16 April 2020; or
- self-isolated on or after 28 May after receiving a notification from a public health body that they had been in contact with someone with coronavirus.
Employers can reclaim the payments at the statutory rate of £95.85 per week (£94.25 for payments made before 6 April 2020). Claims can be made through an online portal which lists the various pieces of information an employer will need to make a claim.
Coronavirus Business Interruption Loan Scheme
Who can apply?
To be eligible for a facility under CBILS, an SME must:
- Be UK-based in its business activity, with annual turnover of no more than £45m
- Have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender.
- Be UK-based in its business activity
- Have an annual turnover of no more than £45 million
- Have a borrowing proposal which the lender would consider viable, were it not for the current pandemic
- Self-certify that it has been adversely impacted by the coronavirus (COVID-19)
- Not have been classed as a “business in difficulty” on 31 December 2019, if applying to borrow £30,000 or more.
What’s on offer?
- The scheme provides facilities of up to £5m for smaller businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cashflow.
- CBILS supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance. The scheme provides the lender with a government-backed guarantee.
- The maximum value of a facility provided under the scheme will be £5m, available on repayment terms of up to six years for loans and asset finance.
- The scheme provides the lender with a government-backed, partial guarantee (80%) against the outstanding facility balance.
- There will be no fee for smaller businesses. Lenders will pay a fee to access the scheme. For overdrafts and invoice finance facilities, terms will be up to three years.
- The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender fees.
- The borrower always remains 100% liable for the debt.
Bounce Back Loans (BBLs)
Who can apply?
Your business must be able to self-declare to the lender that it:
- has been impacted by the coronavirus (COVID-19) pandemic
- was not a business in difficulty at 31 December 2019 (if it was, you must confirm your business complies with additional state aid restrictions under de minimis state aid rules)
- is engaged in trading or commercial activity in the UK and was established by 1 March 2020
- is not using the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS) or the Bank of England’s Covid Corporate Financing Facility Scheme (CCFF), unless the Bounce Back Loan will refinance the whole of the CBILS, CLBILS or CCFF facility
- is not in bankruptcy or liquidation or undergoing debt restructuring at the time it submits its application for finance
- derives more than 50% of its income from its trading activity (this requirement does not apply to charities or further-education colleges)
- is not in a restricted sector.
What’s on offer?
- Loans for six years of £2,000 to £50,000, up to 25% of the business’s turnover
- A 100% government-backed guarantee to the lender for the full outstanding balance of the loan (although the borrower remains 100% liable for the debt
- A Government Business Interruption payment to cover the first 12 months’ interest on the loan
- No repayment requirement for the first 12 months
- An annual interest rate of 2.5% for all loans.
Businesses that have already received support under CBILS are also excluded, although there are provisions for them to transfer CBILS loans of up to £50,000 to the new scheme.
Temporary Rates Relief
Retail, leisure and hospitality relief
On 17 March 2020, the Government announced that it was “giving all retail, hospitality and leisure businesses in England a 100% business rates holiday for the next 12 months”. This is automatic.
Small Business Grant Funding
All businesses currently eligible for Small Business Rate Relief or Rural Rate Relief are eligible for a grant of £10,000 in 2020-21.
Separately, businesses in the retail, leisure and hospitality sectors that are eligible for full business rate relief, and which occupy properties with a rateable value of £51,000 or under, will be entitled to a grant of £25,000 in respect of each qualifying property that they occupy in 2020-21. A property must be occupied to be eligible for the grant.
Full eligibility guidance can be found here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/881040/business_support_grants-local_authorities_guidance.pdf
Local Authority Discretionary Grants Fund
On 2 May the Government announced an additional £617 million in funding alongside England’s Small Business Grants and Retail, Hospitality and Leisure Grants schemes. This has been termed the “Local Authority Discretionary Grants Fund”. The eligibility criteria are different from those for the original grant schemes, covering some additional categories of business.
Guidance for the disbursement of this additional funding was published on 13 May. The guidance states that the Government wishes to see four categories of business prioritised with this funding:
- Small businesses in shared offices or other flexible workspaces. Examples could include units in industrial parks, science parks and incubators which do not have their own business rates assessment;
- Regular market traders with fixed building costs, such as rent, who do not have their own business rates assessment;
- Bed & Breakfasts which pay Council Tax instead of business rates; and
- Charity properties in receipt of charitable business rates relief which would otherwise have been eligible for Small Business Rates Relief or Rural Rate Relief.
The guidance includes a number of additional stipulations:
- Grant recipients must be small or micro-businesses, as defined in the Companies Act 2006;
- A business’s rateable value or rent must be under £51,000 per year;
- Businesses are not eligible if they have received grants from any other central government funding scheme;
- The maximum grant available under this scheme is £25,000;
- Local authorities will not be able to access an allocation from this fund if they have a projected underspend of 5% or more on the original grant schemes.
Further Individual Support
If you need to claim Universal Credit but have COVID-19 or are self-isolating, you will now be able to claim and to access advance payments upfront without needing to attend a Jobcentre Plus. Please visit https://www.gov.uk/universal-credit for more information.
If you are eligible for new style Employment and Support Allowance, it will now be payable from day 1 of sickness, rather than day 8, if you have COVID-19 or are advised to self-isolate.
If you think you may need financial support from your Local Authority in England, you may be entitled to support from the £500 million Hardship Fund:
- Most of this funding will be used to provide more Council Tax relief, either through existing Local Council Tax Support schemes, or through similar measures.
- The Ministry for Housing, Communities and Local Government (MHCLG) will set out more detail on this funding, including allocations, shortly.
- If you have any questions, please contact your Local Authority.
If you are experiencing financial difficulties meeting your mortgage repayments because of COVID-19, you may be entitled to a mortgage or rental holiday for 3 months. This includes if you are a landlord whose tenants are experiencing financial difficulties because of COVID-19.
If you are a tenant experiencing financial difficulties because of COVID-19, the government will ensure you do not face the threat of eviction for at least 3 months:
- The government has agreed with mortgage lenders that they will offer repayment holidays of 3 months to households in financial difficulty due to COVID-19.
- This will also apply to landlords whose tenants are experiencing financial difficulties because of COVID-19.
- The offer of a payment holiday can be made available to customers who are up to date with payments and not already in arrears.
- Customers who are concerned about their current financial situation should contact their lender at the earliest possible opportunity to discuss if this is a suitable option for them.
- Emergency legislation will be taken forward so that landlords will not be able to start proceedings to evict tenants for at least a 3 month period. This applies to private and social renters.
- At the end of this period, landlords and tenants will be expected to work together to establish an affordable repayment plan, taking into account tenants’ individual circumstances.
If you are experiencing difficulties paying back personal loans or credit card bills as a result of COVID-19, you should read the following information:
- The Financial Conduct Authority (FCA) called on lenders to use flexibility built into their rules to support consumers, taking into account customers’ individual circumstances. Many major lenders have already made statements to this effect.
- If you are experiencing difficulties paying back loans or credit card bills because of COVID-19, you should talk to your lender.
- If you agree a payment holiday with your lender, they should record these in such a way that will not impact on your credit score.