Funding sources for businesses during the COVID-19 pandemic

Blogs 12 Apr 2021

National grants and schemes available to small businesses and the self-employed during the COVID-19 pandemic, including updates and new funding announced in the Budget 2021.

What was announced in the Budget 2021?

In response to the Budget announced by the Chancellor of the Exchequer Rishi Sunak on 3 March 2021, FSB said "the Budget will help many with final push, but much more needed on employment costs and those overlooked".

Read our full response here.

  • The furlough scheme will be extended until the end of September 2021. Employees will continue to receive 80%. As businesses reopen, they will be asked to contribute 10% in July, rising to 20% in August and September.
  • The Self-Employed Income Support Scheme will continue until September, with a fourth grant from February to April, and a fifth grant from May onwards. The fifth grant will be open from late July. Those whose turnover has fallen by 30% will continue to receive the 80% grant. For those whose turnover has fallen less than 30% will receive a 30% grant.
  • Newly self-employed that have filed a tax return can access the fourth and fifth SEISS grant.
  • Increases to the National Living Wage, which will rise to £8.91 for 23+ from April 2021.
  • Doubling of the employer apprentice incentive to £3,000 for any age apprentice.
  • A new restart grant fund of £5bn to help businesses reopen. For businesses reopening in April in England, grants of up to £6,000 per premises will be available. For hospitality, leisure and personal care businesses, this will be up to £18,000.
  • A £700m fund for arts, culture and sporting institutions to help them reopen.
  • A new recovery loan scheme. Businesses of any size can apply for loans from £25,000 to £10m through to the end of this year. The government will provide a guarantee to lenders of 80%.
  • The 100% business rates holiday will continue for the first three months of the year until the end of June. For the remaining nine months, they will be discounted by two-thirds, up to a value of £2m, with a lower cap for businesses who have been able to stay open.
  • 5% reduced rate of VAT extended until 30 September 2021. It will then be 12.5% for a further six months, returning the standard rate in April 2022.
  • Corporation tax will increase to 25% from April 2023. A Small Profits Rate of 19% for small businesses with profits of £50,000 or less.
  • A new Help to Grow initiative for small businesses will commence in the Autumn.  This will provide opportunities to small businesses to allow them to access discounted software and advice as well as subsidised training in areas such as financial management and marketing. Register your interest here.
  • Planned increases for alcohol duties will be frozen.

This guide contains information regarding national grants and schemes available to small businesses and the self-employed.

Grants and funding are also available at local authority level to help support businesses through the COVID-19 crisis. To find out what help and support is available in your area, we strongly recommend you contact your local council.

This information is updated regularly and is correct to the date shown above. We always recommend checking with your Local Authority for sources of local funding in addition to those mentioned here. 

FSB members should log into their dashboard to find details of their local FSB contacts, who can outline local support available.


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Coronavirus Job Retention Scheme

Deadline: Extended until 30 September 2021
Available in: England, Scotland, Wales, Northern Ireland

“This much-needed furlough extension should be complemented by further measures to bring down employment costs,” said Mike Cherry, National Chairman of FSB. Read our full response here.

The Coronavirus Job Retention Scheme (CJRS) will now be in place until 30 September 2021. Read our update to furlough to learn more.

The Government will pay at least 80 per cent of employee wages up to a maximum of £2,500 a month. Employers will be required to pay the National Insurance and pension contributions for each employee.

From July 2021 employers will be asked to contribute 10% of the cost, rising to 20% in August and September 2021.


Self-Employment Income Support Scheme

Deadline: September 2021
Available in: England, Scotland, Wales, Northern Ireland

The Self-Employed Income Support Scheme has been extended to September 2021.

The grant extension will apply to the newly self-employed who have filed a tax return before midnight on 2 March 2021. Those whose turnover has fallen by 30% will continue to receive the 80% grant. Those whose turnover has fallen by less than 30% will receive a 30% grant.

Grant four: February to April 2021. Applications will be open from late April.

Grant five: From May onwards. The fifth grant will be open from late July.

Am I eligible?

The Self-Employment Income Support Scheme is open to those who are self-employed or a member of a partnership that has been adversely affected by coronavirus (COVID-19).

To claim you must:

  • Be currently actively trading and intending to continue to trade but are impacted by reduced demand due to coronavirus
  • Have been unable to trade due to the impact of coronavirus
  • Reasonably believe there will be a significant reduction in your trading profits due to reduced demand or your inability to trade. If you’re unsure, the Government website outlines example scenarios.

Limited companies or trusts cannot claim the grant. The Government has extensive advice on eligibility for the scheme which includes an eligibility checker on their website.


Recovery Loan Scheme

Deadline: 31 December 2021
Available in: England, Scotland, Wales, Northern Ireland

Applications for CBILS and BBLS closed on 31 March 2021. The Recovery Loan Scheme will replace CBILS and BBLS, with loans of up to £10m, Rishi Sunak has announced. Applications will open on 6 April.

Finance terms are up to six years for term loans and asset finance facilities, providing support as businesses recover and grow following the disruption of the pandemic and the end of the transition period. Find out here how the FSB Funding Platform can help FSB members access lenders that participate in the Recovery Loan Scheme in minutes and check their funding options in one place. The Co-operative Bank will be on the panel of lenders.

Businesses can get access to other types of funding such as Business Loans, Asset Finance, Invoice Finance, Growth Capital, Pension Finance, Property Funding, or Trade Finance. Innovative businesses can also get funding for R&D and claim back up to 33% of their R&D costs.


VAT rate reduction

The reduced VAT rate of 5% will be extended until 30 September 2021. Following this, an interim rate of 12.5% will be in place for a further six months with the standard rate of 20% returning in April 2022.

Check which businesses are eligible for the temporary reduced rate of VAT


VAT Deferral Payments Scheme

Deadline: 21 June 2021 
Available in: England, Scotland, Wales, Northern Ireland

If you deferred VAT payments between 20 March 2020 and 30 June 2020, you can either:

You may be charged interest or a penalty if you do not:

  • pay the deferred VAT in full by 31 March 2021
  • opt into the new payment scheme by 21 June 2021
  • agree to extra help to pay with HMRC by 30 June 2021

To prepare for the scheme, you must:

  • create your own Government Gateway account if you don’t already have one
  • submit any outstanding VAT returns from the last 4 years. You will not be able to join the scheme if you have not done so
  • correct errors on your VAT returns as soon as possible. Corrections received after 31 December 2020 may not show in your deferred VAT balance
  • make sure you know how much you owe, including the amount you originally deferred and how much you may have already paid

Deferral of Self Assessment payments on account

Deadline: TBC
Available in: England, Scotland, Wales, Northern Ireland

Self-assessed income taxpayers can spread their outstanding tax payments over a 12-month period from January 2021. Payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.

If you owe less than £10,000, you might be able to set up a Time to Pay Arrangement online. This lets you pay your Self Assessment tax bill in installments.

We will update this entry when further details are published. 


Coronavirus Statutory Sick Pay Rebate Scheme

Deadline: Not yet announced
Available in: England, Scotland, Wales, Northern Ireland

If you’re an employer, you may be able to use the Coronavirus Statutory Sick Pay Rebate Scheme to claim back employees’ coronavirus-related Statutory Sick Pay (SSP).

The repayment will cover up to two weeks, starting from the first day of sickness due to COVID-19. The scheme can be used if you had a PAYE payroll scheme that was created and started on or before 28 February 2020, and you had fewer than 250 employees on 28 February 2020.

Check if you are eligible.

Additional Restrictions Grant (ARG)

Deadline: TBC

Available in: Check with your local authority

The Additional Restrictions Grant (ARG) provides local councils with grant funding to support businesses that are severely impacted by restrictions.

Local councils have the freedom to determine the eligibility criteria for these grants. Howevert the funding should be used to help businesses that are severely impacted by the restrictions.

Find out more about the ARG in your area via your local council's website


The Restart Grant

Start date: 1 April 2021
Available in: Check with your local authority

On 3 March 2021, Government announced the introduction of grant support for non-essential retail, hospitality, accommodation, leisure, personal care and gym businesses in England.

The restart grant replaces the Local Restrictions Support Grant (Closed) and Local Restrictions Support Grant (Open) scheme. 

Non-essential retail businesses will receive up to £6,000 per premises. Gyms, leisure, personal care, accommodation and hospitality businesses will receive up to £18,000. The sum received is calculated from the rateable value of your business. 

  • If your business has a property with a rateable value of £15,000 or less, you can claim up to £8,000
  • If your business has a property with a rateable value of between £15,000 and £51,000, you can receive up to £12,000
  • If your business has a property with a rateable value over £51,000 then you can claim up to £18,000

This grant is administered by local authorities, find out how to contact yours here.


Other Discretionary Grants and Funding

Other business grants are being administered by local authorities - any queries should be addressed to them directly. All businesses can speak to their Local Authority about business rates payment deferrals.

You can find contact details for your local authority on the GOV.UK website.


Scotland Specific Funding

In addition to the UK-wide initiatives, there are a number of schemes specific to Scotland. Find out how to apply for the Strategic Framework Business Fund and more information here.

Sector-specific support

The Scottish Government has launched a large number of support schemes with help extended to the newly self-employed and people who provide close contact services (e.g. hairdressers). Full details of these can be found on the find business support website.

Business Rates

In addition to the Small Business Bonus, retail, hospitality and leisure businesses will get 100% rates relief in 2020-21. It is expected that this help will continue into the financial year 2021-22, though businesses will need to apply for the relief through their local authority.  

Local Authority Support

Councils in Scotland are also providing additional help for local businesses. Approach your local authority about their discretionary fund or your Development Manager to find out what’s available. More information can also be found on the find business support website.

Strategic Framework Business Fund

The Strategic Framework Business Fund (SFBF) provided grants to businesses that were required to close by law or to significantly change their operations due to COVID-19 restrictions from 2 November 2020. A Restart Grant will also be paid to businesses receiving payments from this fund


Wales Specific Funding

The Business Wales Government portal contains a fully searchable database of funding currently available to Welsh businesses during the pandemic. An eligibility checking tool for the ERF Phase 3 Business Development Grant is also available

Business Rates

All retail, leisure and hospitality businesses with a rateable value of £500,000 or below will receive 100% non-domestic rates relief in 2020-21. This relief will be available from 1 April 2020 until 31 March 2021.

Sectoral support

There are various different sectoral support packages for agriculture, childcare, culture, creative and sports sector, life sciences, social business sector and taxi and private hire. Full details can be found on the Business Wales website.


Northern Ireland Specific Funding

NI Business Info provides links to the availability of funding for businesses based in Northern Ireland. 

Business Rates

Properties used for certain purposes will not be charged business rates from 1 April 2020 to 31 March 2021 in Northern Ireland. The sectors are listed below, with examples of some of the qualifying uses:

  • Hospitality – including restaurants, cafes, coffee shops, public houses.
  • Tourism – including B&Bs (which pay business rates), guest houses, hotels, privately run caravan & camping sites, self-catering holiday accommodation, tourist attractions and facilities.
  • Leisure – including cinemas, theatres, leisure centres and facilities, museums, sports premises, sports grounds and associated sport clubs, clubhouses, and music venues.
  • Retail and retail services – shops of all types and sizes (excluding retail premises with retail floor space greater than 500m² Net Internal Area (NIA) and which is wholly or mainly used for the retail sale of food and household goods; and off-licences). Examples of services include hairdressers, barbers, nail and beauty services, fast food outlets, garden centres, travel agencies, car showrooms, auction houses, retail estate agents, and clothing, shoe or electrical goods repairs.
  • Childcare – children’s day-care and nursery premises.
  • Airports – Belfast City Airport, Belfast International Airport and City of Derry Airport.
Sectoral support

There are various different sectoral support packages for childcare and arts activities. Full details can be found on the NI Business Info website.


Resources and links

UK wide

HMRC coronavirus helpline for businesses and the self-employed
Call: 0800 024 1222
Lines Open: Monday - Friday, 8am to 4pm

HMRC Time To Pay helpline:

Call: 0300 200 3835
Lines Open: Monday - Friday, 8am to 4pm

You can also use the dedicated coronavirus business support finder.

England

The UK Government’s Department for Business, Energy and Industrial Strategy has launched a dedicated business support helpline, where small business owners in England can get advice on how to minimise/cope with the impacts of coronavirus.

Call 0800 998 1098
Lines open Mon - Friday 9am - 6pm
Email [email protected]

Scotland

The Scottish Government coronavirus helpline
Call 0300 303 0660
Lines open Mon - Friday 8:30am - 5:30pm

Scottish Government COVID-19 hub
 Wales

Wales Business Helpline

Call 0300 060 3000
Lines open Mon - Friday 8:30am - 5:30pm
Welsh Government COVID-19 hub

Northern Ireland

NI Business info
Call 0800 181 4422
Lines open Mon - Friday 8:30am - 5pm

NI Government COVID-19 hub


 

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