Coronavirus: government support for construction businesses

Last updated: 27th March 2020

Recently, the government launched a £330 billion package of support to help UK businesses with any difficulties they may face thanks to the coronavirus, or COVID-19 outbreak. You can find all the initiatives available for small and medium-sized construction businesses below.

Cash grants

What is it?
A one-off £10,000 grant now included in small business rate relief and rural business rate relief, to help you meet your ongoing business costs.

Who’s eligible?
Businesses receiving small business rate relief or rural rate relief.

How can I access it?
Local authorities will be getting funding for the scheme in early April – and they’ll contact you to kick-start the process, so you won’t need to apply.

The Coronavirus Business Interruption Loan

What is it?
A loan of up to £5 million for up to six years, which is interest-free for the first 12 months. The government will cover the first 12 months of interest payments, making it an efficient way to get cash into your business at little to no cost. Of course, this depends on how much you borrow and how long for.

Who’s eligible?
UK-based small to medium-sized businesses with a turnover of less than £45 million per year. You’ll also need to meet the other British Business Bank eligibility criteria, which you can find here.

How can I access it?
To apply, contact your bank or one of the 40 accredited finance providers. You can find the best way to contact them on their websites. For more information on the scheme, visit the British Business Bank website here.

Sick pay refunds

What is it?
A new legislation which refunds businesses up to two weeks of Statutory Sick Pay (SSP) that they pay to each employee as a result of coronavirus. This initiative is a great way to help you cover the cost of large-scale sick leave.

SSP has now been accelerated to be payable, and therefore refundable, from the first day of illness that’s due to coronavirus. It’s currently capped at £94.25 per week.

Who’s eligible?
Employers with less than 250 employees as of 28th February 2020.

How can I access it?
The government is currently developing a rebate scheme and will provide further details.

In the meantime, you should maintain records of all staff absences and SSP that you pay. Employees won’t have to provide you with a GP fit note, but if you need evidence for your records, let your employees know that they can get an isolation note from NHS 111 online, or from the NHS website if they live with someone who has symptoms of the coronavirus.

The eligibility period for the scheme will start the day after the regulations on the extension of SSP to those staying at home comes into force. Keep up to date here.

HMRC’s Time To Pay service

What is it?
Tax support for the self-employed or businesses of any size. HMRC will discuss your specific circumstances with you to explore:

  • Arranging an instalment arrangement.
  • Suspending debt collection proceedings.
  • Cancelling penalties and interest if you have administrative difficulties contacting or paying HMRC immediately.

The service also includes a new dedicated helpline, where 2,000 call handlers are on hand to offer you practical help and advice.

Who’s eligible?
The self-employed and businesses of all sizes that pay tax to the UK government and have outstanding tax liabilities.

How can I access it?
The helpline number is 0800 0159 559 and it’s open 8am – 8pm Monday to Friday and 8am – 4pm on Saturdays. You can find more information here.

VAT and Income Tax Self-Assessment deferrals

What is it?
VAT payments will be deferred for three months so you won’t have to make a payment until 30th June 2020). You’ll have until the end of the 2020 to 2021 tax year to pay any liabilities accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as usual.

All income tax self-assessments that were due on the 31st July 2020 will be deferred until 31st January 2021. No penalties or interest for late payment will be charged during the deferral period.

Who’s eligible?
All businesses are eligible for the VAT deferral, whilst the Income Tax Self-Assessment deferral applies to the self-employed.

How can I access it?
Both deferrals are automatic offers – so you don’t need to apply.

Coronavirus Job Retention Scheme

What is it?
A government grant to help employers pay 80% of the wages of employees that are on the payroll but can’t work during the coronavirus outbreak, also known as furloughed employees. The grant will be capped at £2,500 per employee per month and will be backdated to 1st March.

Who’s eligible?
All UK employers.

How can I access it?
HMRC are working urgently to set up a reimbursement system – check the government website for updates. You’ll need to:

  • Designate any affected employees as ‘furloughed workers’ and let them know of this change.
  • Let HMRC know about these employees and their earnings through a new online portal, which you can access once the reimbursement system is live.

The government has also delayed the introduction of IR35, which is a new tax legislation requiring contractors that are employees in all but name to pay broadly the same tax as direct employees. The legislation will now be introduced in April 2021.

For additional information on each of the support services available, head to the government guidance website.

To help you keep your business in good shape during these uncertain times, the team at Rated People are working hard to keep new job leads coming in. So far, we’ve even seen a rise in demand for gardeners, painters, carpenters and more – take a look at the latest job leads.

The latest government advice is that you can travel to and from work, where it’s absolutely necessary and you can’t work from home.

They have clarified that for tradespeople working in people’s homes:

You can carry out work as long as you’re well and have no symptoms, and can stand 2 metres apart from anyone else in the house. You shouldn’t carry out work in any households that are self-isolating or if an individual is classed as vulnerable and being protected, unless the work is to sort a problem which is a direct risk to the safety of the household, like emergency plumbing or repairs, and where you’re willing to do so.

View the government guidelines here.

For onsite workers:

Outside of work, tradespeople should follow the advice to stay at home wherever possible.

In Scotland, all building sites have been advised to close unless they involve an essential building like a hospital, and everyone, except key workers, have been advised not to go to work. However, tradespeople that work alone and provide community services, such as gardeners and window cleaners, can still complete jobs – as long as it’s safe to do so. Tradespeople need to be able to follow the social distancing guidelines of standing at least 2 metres apart from another person.

Coronavirus (COVID-19) Self-employment Income Support Scheme

What is it?
A direct cash grant of 80% of your average trading profit over the last three years. The grant will be capped at £2,500 per month for March, April and May. It will be paid in a single lump sum instalment covering all three months, with payments starting at the beginning of June. The scheme will have an initial three-month lifespan, then the government will review its performance.

If you need help sooner than June, you can still access the other government support schemes detailed above. The government has advised that most people will be able to access their business interruption loans and they’ve changed the welfare system so you can access universal credit in full. Also, the three-month mortgage payment holidays being offered by mortgage lenders may help to relieve some of your expenses until June. Visit your lender’s website for more information.

This scheme is equivalent to the support available to people classified as ‘employed’.

Who’s eligible?
Anyone who’s self-employed with either:

  • A trading profit of less than £50,000 in 2018-19, or
  • An average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19

You must also:

  • Have submitted your Income Tax Self-Assessment tax return for the tax year 2018-19
  • Have traded in the 2019-20 tax year
  • Be currently trading when you apply (or would be if not for COVID-19)
  • Intend to continue trading in the 2020-21 tax year
  • Have lost trading or partnership trading profits due to COVID-19

Also, more than half of your income in these periods must come from self-employment. Members of partnerships are also eligible for the scheme.

If you pay yourself a salary and dividends through your own company, you won’t be covered by this scheme. However, if you’re operating PAYE schemes then your salary will be covered by the Coronavirus Job Retention Scheme.

If you have less than three years’ worth of accounts, you will still be eligible as long as you have at least one year of accounts. If you have one year’s worth of accounts, that’ll be used for your average. The same goes for two years’ worth of accounts.

If you don’t have a year’s worth of accounts, you should look at the other financial support that’s available.

The government believes that the scheme should cover 95% of people who receive the majority of their income from self-employment.

How can I access it?
You don’t need to apply – HMRC will use existing information from tax returns to identify eligible taxpayers and invite them to apply online. The scheme is currently being set up, so keep an eye on the government guidance for updates on its progress.

If you missed the deadline for your Income Tax Self-Assessment tax return, you have until 23rd April 2020 to do so – file it as soon as possible so that you can qualify for the scheme.

For more information on staying safe whilst working, head here.

For FAQs about using our service, head here.

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