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Coronavirus: government support for construction businesses

Last updated: 31st July 2020

Since the coronavirus (COVID-19) outbreak, the government has put billions into a package of support to help UK businesses with any difficulties they may face. You can find all the initiatives available for small and medium-sized construction businesses below.

The Job Retention Bonus

What is it?
As part of the Government’s plan for Jobs 2020, announced on 8th July, there is a new financial bonus available to employers. Businesses who bring furloughed staff back to work and keep them working until the end of January 2021, will be able to claim a £1,000 bonus.

Who’s eligible?
To qualify for the bonus employers will need to continuously employ a worker until the end of January 2021, who is paid at least an average of £520 per month for that period.

How can I access it?
Payments will be made from February 2021. Details of the application process have not yet been publicised but will be announced by the end of July. You can find out more information on the Plan for Jobs 2020 at gov.uk.

Bounce Back Loan Scheme

What is it?
A scheme to help small and medium-sized businesses affected by coronavirus (COVID-19) by allowing them to secure a loan worth 25% of their turnover, to a maximum of £50,000. Loans will be between £2,000 and £50,000.

The scheme has been designed so that eligible small businesses can access financial support in a matter of days from when they submit their application, with most businesses receiving their loan within 24 hours of their application being approved. The government will guarantee 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. Loan terms will be for up to 6 years.

The scheme will be rolled out through a network of accredited lenders and the government has said it will work with lenders to agree a low interest rate for when you come to make repayments.

Who’s eligible?
Businesses based in the UK that have been negatively affected by coronavirus (excluding banks, insurers, reinsurers, public-sector bodies, further education establishments that are grant-funded and state-funded primary and secondary schools).

Your business must not have been ‘undertaking in difficulty’ on 31st December 2019. If you’ve already secured a loan under the Coronavirus Business Interruption Loan Scheme, you won’t be able to claim under this one, but you can transfer a Coronavirus Business Interruption Loan of up to £50,000 into the Bounce Back Loan Scheme until 4th November 2020. To transfer, you’ll need to speak to your lender.

How can I access it?
You can apply by filling in a short online form, and find out more about the application, on the British Business Bank website.

If you’d like more information on the Bounce Back Loan Scheme, head to Gov.uk here.

Small Business Grant Fund

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 with a property that receive small business rate relief or rural rate relief (as of 11th March 2020).

How can I access it?
Local authorities will contact you to kick-start the process, so you won’t need to apply.

Coronavirus Business Interruption Loan Scheme

What is it?
A loan of up to £5 million for up to six years. The government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, 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 a borrowing proposal that the lender would consider practical if not for the coronavirus pandemic, as well as be able to meet the other British Business Bank eligibility criteria.

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.

Coronavirus Statutory Sick Pay Rebate Scheme

What is it?
A new legislation which refunds businesses up to two weeks of Statutory Sick Pay (SSP) that they pay to each employee from 13th March 2020, because they either have coronavirus or can’t work because they’re self-isolating. It covers all types of employment contracts, from full-time to zero-hour, making it 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 £95.85 per week.

In order for you to claim a SSP repayment for an employee, said employee needs to meet one of the following criteria:

  • They have coronavirus symptoms.
  • They are self-isolating because they live with someone who has symptoms.
  • They are self-isolating because the NHS/other public health body has notified them that they’ve come into contact with someone with coronavirus.
  • They are shielding and have a letter from the NHS or GP telling them to stay at home for at least 12 weeks.

From 8th June, most people entering or returning to the UK are required to quarantine for 14 days. If an employee is unable to work during this period, they will not be eligible for SSP unless they meet one of the above criteria.

Who’s eligible?
Employers with less than 250 employees and a PAYE payroll scheme as of 28th February 2020. You can make a claim if:

  • You have already paid your employee’s sick pay.
  • You’re claiming for an employee who’s eligible for sick pay due to coronavirus.
  • You have a PAYE payroll scheme that was started on or before 28th February.
  • You had less than 250 employees on 28th February.

How can I access it?
You can make a claim online here.

You’ll need to have records of all SSP that you want to claim back, including:

  • The reason why an employee couldn’t work.
  • Start and end dates of each sick period.
  • The SSP qualifying days when an employee couldn’t work.
  • National Insurance numbers of each employee you pay SSP to.

Keep these records for at least three years after you claim.

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.

Keep up to date with the scheme 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 024 1222 and it’s open 8am – 4pm Monday to Friday except on bank holidays. You can find more information here.

VAT and Income Tax Self-Assessment deferrals

What is it?
VAT payments that were due between 20th March and 30th June 2020 were able to be deferred until 31st March 2021. 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.

If you chose to defer your VAT payment, then you need to:

  • Set up a new Direct Debit in enough time for HMRC to take payment.
  • Continue to submit VAT returns on time.
  • Pay the VAT in full on payments due after 30th June.
  • Pay any deferred VAT payments in full on or before 31st March 2021.

All income tax self-assessments 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 that had a VAT payment due between 20th March and 30th June 2020 were 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 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. It will be backdated to 1st March and will continue until October.

In June and July, the government will pay 80% of wages (up to £2,500) for the hours that the employee is on furlough, plus the associated Employer National Insurance Contributions (ER NICs) and pension contributions.

In August, the government will continue to pay 80% of wages (up to £2,500) for the hours that the employee is on furlough. However, employers will have to pay the associated ER NICs and pension contributions.

In September, the government will pay 70% of wages, up to a cap of £2,187.50, for the hours that the employee is on furlough. Employers will continue to pay the associated ER NICs and pensions contributions, as well as being required to top up the employee’s wages to ensure that they receive 80% of their wages (up to £2,500).

In October, the government will pay 60% of wages, up to a cap of £1,875, for the hours that the employee is on furlough. Employers will pay the associated ER NICs and pensions contributions, as well as topping up the employees’ wages to ensure that they receive 80% of their wages (up to £2,500).

If you want to, you can top up your employees’ wages past the 80% total and £2,500 cap.

Who’s eligible?
All UK employers that have a UK bank account, a PAYE payroll scheme that started on or before 19th March 2020 and are enrolled for PAYE online.

You can claim for any furloughed employees if you have:

  • Furloughed the employee for at least 3 consecutive weeks between 1st March and 30th June 2020.
  • A UK PAYE scheme that started on or before 19th March 2020.
  • Enrolled for PAYE online.
  • Submitted a report under the Real Time Information reporting system for a furloughed employee on or before 19th March 2020.
  • A UK bank account.

How can I access it?
You can claim online here. You’ll need the Government Gateway user ID and password you got when you registered for PAYE online. If you can’t complete your claim in one session, you can save a draft but it has to be completed within 7 days of starting it.

You can find more information on what you’ll need to claim, how and what to expect after you’ve claimed here.

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.

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

What is it?
Two direct cash grants. The first was for the period ending 13th July 2020, and was worth either 80% of your average trading profit over the last three years or £7,500, whichever is lower. The first grant is now closed to new claims.

The second grant is worth 70% of your average monthly trading profits. It’ll be paid out in one instalment which will cover 3 months’ worth of profits and will be capped at £6,570 in total.

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?
HMRC will use existing information from tax returns to identify eligible taxpayers and invite them to apply online. Applications will open for the second grant from 17th August 2020 – the government will update their guidance with a link to the portal when it’s available.

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.

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

If there’s a lockdown announced in the regional area(s) that you work or live in, in addition to the national lockdown, the government says that you must follow all instructions on working safely from the relevant local authority. You can find out which areas currently have special restrictions in place on Gov.uk.

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

For FAQs about using our service, head here.

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2 Comments

    1. Hi Graham, self-employed people are eligible for the Self-employment Income Support Scheme and the Business Interruption Loan Scheme. You’re also able to get help with your tax by deferring your Income Tax Self-Assessment and the HMRC Time to Pay support service.

      Hope this helps!

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