Last updated: 2nd June 2021
Since the COVID-19 outbreak, the government has put billions into a package of coronavirus support to help UK businesses with any difficulties they may face. You can find all the latest initiatives available for small and medium-sized construction businesses below.
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GRANTS
TAX
- Super deduction of capital expenditure
- Small Profits Rate
- Extension to carry back rules
- HMRC’s Time to Pay service
- VAT and Income Tax deferrals
LOANS
JOBS SUPPORT
- Job Retention Scheme (furlough)
- Statutory Sick Pay Rebate Scheme
- Job Retention Bonus (currently on hold)
- Job Support Scheme (currently on hold)
GRANTS
Coronavirus (COVID-19) Self-employment Income Support Scheme (SEISS)
What is it?
Five direct cash grants ā applications for the first grant (worth up to Ā£7,500), second grant (worth up to Ā£6,750), third grant (worth up to Ā£7,500) and fourth grant (worth up to Ā£7,500) have now ended. Applications for the fifth grant will be open from late July 2021.
The fifth SEISS grant
The amount of the fifth grant that you’ll get will depend on how much your turnover has reduced by from April 2020 to April 2021.
- Those whose turnover has reduced by 30% or more: You’ll get 80% of 3 months’ average trading profits, capped at Ā£7,500.
- Those whose turnover has reduced by less than 30% or more: You’ll get 30% of 3 months’ average trading profits, capped at Ā£2,850.
Claims for the fifth SEISS grant will open from late July 2021. The government will provide more details on how to apply by the end of June 2021 ā we’ll keep this blog post up to date.
Whoās eligible?
To be eligible, you must be self-employed or a member of a partnership, and:
1. Have trading profits of Ā£50,000 maximum
HMRC will look at your 2019 to 2020 Self Assessment tax return to confirm this. Your trading profits also need to be equal to your non-trading income, at a minimum.
If you’re not eligible based on your 2019 to 2020 Self Assessment tax return, then HMRC will look at the 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020 tax years.
2. Have traded in the 2019-2020 and 2020-2021 tax years
For the 2019-2020 tax year, you must have submitted your Self Assessment tax return by 2nd March 2021.
3. Be impacted by coronavirus
You must be currently trading, but are impacted by reduced demand caused by coronavirus. Or, you have been trading but are temporarily unable to do so due to coronavirus.
4. Make certain declarations
You must declare that you intend to continue to trade, and that you have reasonable belief there will be a significant reduction in your trading profits caused by reduced business activity, capacity, demand or an inability to trade, due to coronavirus, from May to September 2021.
How can I access it?
If you’re eligible based on your tax returns, HMRC will get in touch with you in mid-July 2021 to give you a date to make your claim.
We’ll share details of how to apply once they’re released. Read more about the fifth grant on Gov.uk.
TAX
Super deduction of capital expenditure
What is it?
From 1st April 2021 until 31st March 2023, a 130% deduction for qualifying capital expenditure and a 50% first year allowance on most new plant and machinery investments (that usually qualify for 6% special rate writing down allowances) will be introduced.
So, if you buy a new van for Ā£30,000 excluding VAT, this means that you can claim Ā£39,000 on your profit and loss sheet, for tax purposes. This is likely to be the biggest tax reduction in the last 50 to 60 years! It’s also likely to have the biggest impact on smaller businesses.
This super deduction will reduce your company’s tax bill by 25p for every Ā£1 that you invest in new equipment, according to Gov.uk.
Who’s eligible?
Businesses within that pay Corporation Tax. Unincorporated businesses aren’t eligible for this new deduction, but can still continue to claim capital allowances at 100%, up to Ā£1million (as per the annual investment allowance).
How can I access it?
Make the deduction on your profit and loss sheet. Read more on Gov.uk.
Small Profits Rate (SPR)
What is it?
In the Budget on 3rd March 2021, the government announced that Corporation Tax will increase to 25% from April 2023. However, this increase won’t affect smaller businesses, through the introduction of the SPR.
The SPR means that businesses with a profit of Ā£50,000 or less will continue to pay Corporation Tax at 19%. The government says that this means around 1.4 million actively trading businesses won’t be affected by the tax increase.
Corporation Tax rates will taper from 19% to 25% for businesses with profits of Ā£50,000 to Ā£250,000. Businesses with profits over Ā£250,000 will pay the full 25% Corporation Tax rate.
Whoās eligible?
To be eligible for the SPR, you must be an actively trading company with profits of Ā£50,000 or less.
How can I access it?
The Corporation Tax rise and SPR won’t come into place until April 2023. Find out more about the changes on Gov.uk.
Extension to carry back rules
What is it?
In the recent Budget, the government extended the carry back of trading losses for Corporation Tax and Income Tax for up to three years. You’ll be able to carry back losses of up to Ā£2million for two more years, in addition to the existing one-year carry back rule. So, if you have a trading loss made in this year, you can claim an additional tax refund of up to Ā£760,000.
If you pay Corporation Tax, the new carry back rule applies to losses made in accounting periods ending between 1st April 2020 and 31st March 2022, up to a limit of Ā£2million for each year. Businesses claiming for losses of over Ā£200,000 will need to submit a loss allocation statement.
If you pay Income Tax as an unincorporated business (e.g. you’re a sole trader), this carry back rule applies to losses made in the 2020 to 2021 and 2021 to 2022 tax years. This is up to a cap of Ā£2million for each tax year.
Losses will be carried back against the most recent of the 3 years first.
Who’s eligible?
Businesses in the UK that pay Corporation or Income Tax.
How can I access it?
The government will release more information in due course. We’ll keep this article up to date.
Read more about the carry back extension on Gov.uk.
HMRCās 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. Over 2,000 call handlers are on hand to offer you practical help and advice.
Whoās 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 is open now. The helpline number is 0800 024 1222 and itās open 8am ā 4pm Monday to Friday except on bank holidays. You can find more information on Gov.uk.
VAT and Income Tax deferrals
What is it?
Deferred VAT payments
VAT payments that were due between 20th March and 30th June 2020 were deferred until the 2021/22 financial year. On 24th September 2020, the government announced a new payment scheme. This allows businesses to make up to 11 smaller, interest-free VAT payments until the end of March 2022. This is instead of paying a lump sum on 31st March 2021, as the government had previously stated. You can still pay your deferred VAT in full now if youāre able to.
The number of instalments available to you depends on when you join the new payment scheme:
| Date you joined by | Number of instalments you can get |
| 19th March 2021 | 11 |
| 21st April 2021 | 10 |
| 19th May 2021 | 9 |
| 21st June 2021 | 8 |
Find out more about the VAT deferral new payment scheme on our Trade Advice Centre.
If you chose to defer your VAT payment, then you need to do one of the following:
- Join the VAT deferral new payment scheme by 21st June 2021. There’s more details on how to do this below.
- Pay your VAT bill in full now, if you’re able to. You can do this on Gov.uk.
- Contact HMRC on 0800 024 1222 by 30th June 2021 if you need more help with paying.
You must make an arrangement to pay or pay your bill in full by 30th June 2021, or you may be charged a 5% penalty or interest.
Deferred Income Tax bills
In the Winter Economy Plan on 24th September 2020, the government also announced that Self Assessment taxpayers with Income Tax liabilities of up to Ā£30,000 can access a separate 12-month extension on their tax bill, through the Time to Pay service (explained in the previous section of this blog post). This means that payments deferred from 31st July 2020, and those that were due on 31st January 2021, will not need to be paid until January 2022.
Read more about the coronavirus support announced in the Winter Economy Plan.
All Income Tax payments that were due on the 31st July 2020, and those due on 31st January 2021, don’t need to be paid until January 2022 ā if you secure an extension through the Time to Pay self-service facility. Find out more on Gov.uk.
Whoās eligible?
All businesses that had a VAT payment due between 20th March and 30th June 2020 were eligible for the VAT deferral. The Income Tax Self Assessment deferral applied to the self-employed.
How can I access it?
Deferred VAT payments
The VAT deferral was an automatic offer ā so you didn’t need to apply. But, you’ll need to opt into the VAT deferral new payment scheme, which is open until 21st June 2021.
Join the VAT deferral new payment scheme on Gov.uk.
Deferred Income Tax bills
If you were unable to pay your full Income Tax bill by 31st January 2021, then you can pay it in instalments. File your 2019 to 2020 Self Assessment return as soon as possible, so HMRC knows what payments you owe. You can set up a Time to Pay instalment arrangement with HMRC, 72 hours after you’ve filed your return. If you owe up to Ā£30,000, then you can set this up online, up to 60 days after 31st January 2021.
To set up a Time to Pay instalment arrangement, head to Gov.uk. You can read more about the Income Tax deferral/extension on Gov.uk.
LOANS
The Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme closed to new applications on 31st March 2021.
Recovery Loan Scheme
What is it?
In the Budget on the 3rd March 2021, the government announced a new loan scheme, which offers loans and other finance options worth up to Ā£10 million to businesses of all sizes. The finance available is:
- Term loans and overdrafts of between Ā£25,001 and Ā£10 million per business.
- Asset and invoice finance of between Ā£1,000 and Ā£10 million per business.
The finance terms for loans and asset finance will last for up to 6 years. For overdrafts and invoice finance, terms will last for up to 3 years. You can use any finance that you get through the Recovery Loan Scheme for any legitimate business purpose, including growth and investment.
The scheme will operate through a network of accredited lenders. The government guarantees 80% of the finance to the lender, to help them remain confident to lend to businesses through the scheme.
Who’s eligible?
Businesses that are trading in the UK and can show that their business:
- Is viable, or would be viable were it not for the coronavirus pandemic.
- Is impacted by the coronavirus pandemic.
- Isn’t in collective insolvency proceedings. The government will confirm more details on this aspect soon. We’ll update this blog post as soon as it’s released.
If you’ve received other coronavirus support from the government, you’ll still be able to apply for the Recovery Loan Scheme, as long as you meet the eligibility criteria above.
How can I access it?
You can apply for the scheme until 31st December 2021, on Gov.uk.
JOBS SUPPORT
Coronavirus Job Retention Scheme (also known as the furlough scheme)
What is it?
A government grant to help employers pay the wages of employees that are on their payroll but can’t work during the coronavirus outbreak ā also known as furloughed employees. In the Budget on 3rd March 2021, the government extended the furlough scheme until 30th September 2021. However, the amount of grant available will change from 1st July 2021.
From 1st January to 30th June 2021
The government will pay up to 80% of an employee’s usual wages for hours they’re on furlough, up to a cap of Ā£2,500 per month. As the employer, you’ll pay the employer National Insurance and pension contributions. During these months, you don’t have to contribute towards your employees’ wages for their furlough hours.
In July 2021
The government will reduce their contribution to 70% of an employee’s usual wages for the hours they’re on furlough, up to a cap of Ā£2,187.50 per month. Plus, employers will need to pay 10% of the employee’s wages for their furlough hours, up to a cap of Ā£312.50. So, employees will still get 80% of their usual wages (up to Ā£2,500) for their furloughed hours. As the employer, you’ll still need to pay the employer National Insurance and pension contributions.
From August to September 2021
The government will further reduce their contribution to 60% of an employee’s usual wages for the hours they’re on furlough, up to a cap of Ā£1,875 per month. Employers will increase their contribution up to 20% of the employee’s wages for their furlough hours, up to a cap of Ā£625 per month. Similarly to July 2021, this means employees will get 80% of their usual wages (up to Ā£2,500) for their furlough hours. Employers will also still need to pay the employer National Insurance and pension contributions.
You can choose to top up your employees’ wages above the 80% they receive during furlough, at your own expense. For any hours that the employee works, you’ll need to pay them as usual (as per their employment contract).
To make a claim, employers will need to:
- Put the employee on furlough for a minimum of 7 calendar days. You’re only able to make a claim for a period of less than that if the period you’re claiming for includes either the first or last day of the calendar month and you’ve already claimed for the period ending right before it.
- Report the hours that the employee worked during the claim period, as well as the usual hours they’d be expected to work in the same period.
Employers can claim for the hours that their furloughed employees aren’t working. This is calculated by reference to their usual hours worked within the claim period.
Whoās eligible?
All UK employers that have a UK bank account and a UK PAYE scheme. You don’t have to have previously used the scheme to be eligible.
You’re able to claim for any furloughed employees if:
- You have made a PAYE Real Time Information (RTI) submission to HMRC between 20th March and 30th October 2020, to notify a payment of earnings for the employee. Where you’ve made employees redundant or they stopped working for you on or after 23rd September 2020 and you’ve since re-employed them, special conditions apply.
- You have a UK, Isle of Man or Channel Island bank account.
- You have created and started a PAYE payroll scheme on or before 30th October 2020.
- Enrolled for PAYE online.
You can claim for any employee regardless of their type of contract.
How can I access it?
You need to submit your claim by 11.59pm, 14 calendar days after the month youāre claiming for, at the latest. If that time falls on the weekend or a bank holiday, then you’ll need to submit your claim on the next working day. You can find a full list of the deadlines on Gov.uk.
Make your claim on Gov.uk ā you’ll find more info on what you need to start your claim and what to expect afterwards there, too.
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 due to coronavirus. 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.
There is a weekly cap of Ā£95.85 for each employee. Plus, you can only claim for up to two weeks in total. If you usually pay more than the weekly rate of SSP, then you can only claim up to the weekly cap.
You can claim the Coronavirus Job Retention Scheme and the Coronavirus Statutory Sick Pay Rebate Scheme for the same employee, but not for the same period of time.
Whoās eligible?
Employers with less than 250 employees and a PAYE payroll scheme started on or before 28th February 2020. You can make a claim if:
- You’ve already paid the employee’s sick pay (calculate how much you should pay using the SSP calculator).
- You’re claiming for an employee who’s eligible for sick pay due to coronavirus.
- You had less than 250 employees across all your PAYE payroll schemes, as of 28th February 2020.
Find out more details about the SSP eligibility criteria on Gov.uk.
How can I access it?
Claims are open now. You must have paid your employees’ sick pay before you claim it back. Calculate how much you SSP you should pay them using the online calculator.
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.
You must keep these records for 3 years after the date that you get the payment for your claim.
Once that’s all done, you can make a claim on Gov.uk.
Keep these records for at least three years after you claim. You’ll also need to print or save your state aid declaration from your claim summary. Also, you must keep your declaration until 31st December 2024.
Employees donāt have to provide you with a GP fit note. If you need evidence for your records, let your employees know 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, or
- Get a shielding note/letter from their doctor or health authority which advises them to shield because they’re high risk.
Keep up to date with the scheme on Gov.uk.
The Job Retention Bonus ā CURRENTLY ON HOLD
What is it?
As part of the Governmentās plan for Jobs 2020, announced on 8th July 2020, there is a new financial bonus available to employers. Businesses who bring furloughed staff back to work, and keep them working until 31st January 2021, will be able to claim a Ā£1,000 taxable bonus.
Whoās eligible?
To qualify for the bonus, employers will need to:
- Have furloughed an employee and made an eligible claim for them through the Job Retention Scheme (detailed earlier in this blog post).
- Continuously employ the employee starting from the end of the claim period of your last Job Retention Scheme claim for them, until 31st January 2021.
- Pay the employee at least Ā£1,560 (gross) in total throughout the tax months of 6th November to 5th December 2020, 6th December 2020 to 5th January 2021 and 6th January to 5th February 2021.
You must pay the employee at least one payment of taxable earnings (of any amount) in each of the above tax months.
How can I access it?
You can’t claim the bonus yet ā it’s been postponed due to the Coronavirus Job Retention Scheme having been extended. The government’s planning to share details of the application process soon. Find out more about the Jobs Retention Bonus on Gov.uk.
Job Support Scheme ā CURRENTLY ON HOLD
What is it?
A government grant to top up the wages of staff who are working less than normal hours, due to decreased demand during the coronavirus pandemic. The amount of grant that an employee will get will be calculated based on their normal salary. They can receive a maximum of Ā£697.92 per month.
Employers will still need to pay their staff for the hours that they do work. For each hour not worked, the government and employer will each pay one third of the employee’s lost salary. The employer will need to pay the government’s contribution initially, and then they’ll be reimbursed in arrears. In total, the employee will receive 77% of their pay, where the government contribution hasn’t been capped.
The Job Support Scheme will replace the Job Retention Scheme detailed above from 30th April 2021.
Employers can claim both the Job Support Scheme and the Job Retention Bonus (part of the coronavirus support explained earlier in this blog post) at the same time, so their employees will have extra job security during the coronavirus pandemic.
Whoās eligible?
Employees that are working at least 33% of their usual hours. Employees on redundancy notices won’t be eligible.
All small and medium-sized UK businesses will be able to apply for the grant for their employees, even if they hadn’t used the previous furlough scheme. To be eligible, businesses must:
- Have a UK, Channel Island or Isle of Man bank account.
- Be enrolled for PAYE online.
- Have created and started using a UK PAYE scheme on or before 23rd September 2020.
How can I access it?
The scheme has been postponed due to the extension of the Coronavirus Job Retention Scheme detailed earlier in this blog post. The government’s sharing further guidance soon ā we’ll keep this page up to date.
As part of its coronavirus support for businesses, 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 begin in April 2021.
For more information on the recently-announced government coronavirus support for small businesses over winter, check out our Winter Economy Plan: The latest coronavirus support for tradespeople blog post.
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, weāve even seen a rise in demand for gardeners, painters, carpenters and more ā take a look at the latest job leads.
For additional information on each of the coronavirus support services available, head to Gov.uk.
Note: The government has confirmed that there is no limit to the group size when you are meeting or gathering for work. But, workplaces should be set up to meet the COVID-secure guidelines ā follow the governmentās guidance on how to return to work safely.
Note: Countries may approach the different phases of lockdown differently. This guidance is in line with the UK governmentās advice and is being followed in England. See the specific government websites for any differences.
Note: You must follow the restrictions for your local area. You can also view the UK government guidelines on Gov.uk.
For more coronavirus support, visit our Trade Advice Centre:
- Coronavirus: FAQs for tradespeople
- Working in homes safely during COVID-19: A guide for tradespeople
- Coronavirus: How to keep safe whilst working
- Coronavirus: Staying safe whilst working on a construction site
- Winter Economy Plan: The latest coronavirus government support for tradespeople
- 6 lockdown lessons about running a business
- Coronavirus: Digital marketing tips to make your small business stand out
- Coronavirus: Which buildersā merchants are open to tradespeople?
What funds are there for a self employed sole trader?
Iām still working and have know choose.
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!
The government has also taken some good steps where there has been large-scale destruction due to the coronavirus. This is very good news for the construction business.