2021 has started in a similar fashion to how much of 2020 took place: another lockdown. This lockdown feels a little different than the previous, as we now understand the impact and potential length of time we are facing. We understand what actions need to be taken and the preparation we need to make to ensure our businesses can reopen and thrive later in the year.
An upside to this lockdown is that we are now more familiar with what grants and loans are currently available through the government. There is help out there for businesses in a variety of industries, whether forced to close or impacted by local lockdowns.
Now more than ever it is important to share advice about how to get through lockdown. In previous articles we have explored the decisions you can make internally to help your business survive, but now we look at external measures you can take.
While some of the schemes on offer are more niche than others, there are a few which can be used by many businesses across the spectrum.
The most used scheme throughout the UK throughout the pandemic, this scheme is better known colloquially as furlough. Companies that can not maintain operations due to the pandemic can claim up to 80% of each affected employee’s salary up to £2,500 per month.
While we assume all business owners will be familiar with this scheme by now, it is worth checking in to see how updates may affect your business. The parameters often change and businesses who once could not have qualified may be able to.
Many of the grants and schemes on offer focus on reimbursement for periods of closure. Another grant which is available to a wide variety of businesses across the country is the Local Restrictions Grant. This is in place to provide council funding for businesses forced to close during Tier 2, 3 or 4 restrictions.
The period of eligibility begins from the first ‘tier-system lockdown’ on 9th September, through to the Tier 4 restrictions across the country as of 19th December.
This grant is unique in that it features addendums for both businesses forced to close and those heavily-affected but remaining open. If your business falls into the latter category, check out the local restrictions grant for open businesses.
Keeping on top of regular tax payments in the midst of everything else your business is facing can be a challenge. Throughout the lockdown, Virgate have worked closer than ever with our clients to provide much-needed tax support.
We not only help our partnering clients with the day to day management of taxes, but also outline guidance and schemes which can help them thrive throughout these turbulent times.
There is general government support out there to help businesses manage their taxes.
In 2020, the government offered many businesses the chance to defer their taxes throughout lockdown. Business owners now face the prospect of paying them back with continued uncertainty over reopening.
One of the primary options for businesses that deferred their VAT payments throughout 2020 is to opt-in to the new VAT payment scheme. Rather than facing the prospect of a lump sum, you can split what you owe into 11 interest-free monthly payments.
This scheme is suited to the majority of businesses ranging in size, without many restrictions. For smaller businesses owing less than £30,000 that use the self-assessment form for tax, you may also be able to arrange to pay owed tax in monthly instalments.
This scheme does not involve much work by the business owner as it is automatically applied; however, it is worth quickly double-checking that it has been applied and you are not paying business rates during this time!
This scheme is designed to support an array of businesses including shops, restaurants, leisure facilities and more. Do not worry if you have already received your bill, as the council may have to reissue these.
Small to medium enterprises have been largely affected by the lockdowns and restrictions. Virgate focuses on providing accounting services to this key demographic of businesses in the UK. Our speciality lies in assisting smaller businesses to reach new heights and grow their business and offering.
We have highlighted some government schemes in place which specifically target our clients and can help weather the storm.
Private sector SMEs affected largely by the pandemic may be eligible for the Business Interruption Loan from the government. Applying to businesses across the UK, the scheme helps small businesses access loans and other kinds of finance.
This scheme essentially pulls together multiple lenders that are vetted and approved by the government to provide loans to qualifying companies. The affected businesses must prove that their business would be viable if not for lockdown restrictions, and not have a turnover exceeding £45 million.
Similar to the aforementioned Business Interruption loan for SMEs, there is also an option for large-scale businesses. The cap for this option tops out at £200 million, and you can be provided up to 25% of your turnover up to this limit.
This scheme is open until 31 March 2021, so definitely worth exploring if your business is eligible.
The nature of running a smaller business can mean requiring finance quickly and at relatively short notice. Without the chance to build up substantial savings to draw from, the lockdown restrictions can be difficult. This Bounce Back loan scheme is designed to provide support.
This scheme allows smaller businesses to borrow up to 25% of their annual turnover (up to £50,000). With no interest for 12 months and only 2.5% after this period, it can help with short-term payments.
If you have already borrowed against this loan but did not take the full amount you qualified for, you may be eligible to increase your loan. Pop onto the site and check out your options before 31 March 2021.
Businesses that require investment or funding and are in the pre-profit stage of the lifecycle may look to this fund for assistance. If your business is unable to access other government funding, this fund can help provide loans to see you through until the market has recovered.
This fund is currently scheduled to close on 31 January 2021, and does require providing some proof of incorporation and previous equity funding.
Other noteworthy schemes
Do you own an English business that was forced to close between 5th November and 2nd December? We recommend taking a quick look at this information to find out if you are eligible for a grant to cover losses during this period.
This article focuses on short-term solutions for businesses and more can be found on the government site. These grants and loan schemes are a fantastic way to help your business through a slow patch caused by lockdown restrictions; however, now is the time to take actions to help your business thrive.
Virgate offers a plug-in accounts department which works in partnership with your business, providing everything you need at a fraction of the cost. We are experts that can assist you with payroll, tax, bookkeeping, management accounts reporting and compliance. All our services are provided on the cloud, giving you access to your finances whenever you need them.
Partner with the experts for long-term solutions that can help your business back on its feet after lockdown.
Virgate has helped many businesses cut costs, achieve stability and even thrive over the last 12 months. Get in touch to find out how we can help you >>
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