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Winter Economy Plan: The latest coronavirus government support for tradespeople

In the latest Winter Economy Plan, the government has included measures to support UK businesses that are facing decreased demand or are legally required to close their premises, due to the coronavirus (or COVID-19) pandemic. We’ve summarised the initiatives available for small and medium-sized (SME) trades businesses below.

Self-Employment Income Support Scheme (SEISS) extension

Image of British currency

What is it?

The government has extended the SEISS, which was due to end in November 2020. The SEISS now includes two more direct cash grants.

The first grant will cover 40% of your average monthly trading profits, capped at £3,750 in total. It’ll be paid as a single instalment, covering the three-month period from 1st November 2020 to 31st January 2021. The second grant will also cover a three-month period, from 1st February to 30th April 2021. The government is set to release more information soon about how much the second grant will be.

Both grants are taxable income and are subject to National Insurance contributions.

Who’s eligible?

Anyone who’s self-employed, or a member of a partnership, that:

  • Was previously eligible for the SEISS. However, you don’t need to have actually claimed it. The SEISS eligibility criteria is:
    • 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 have traded in the 2018-19 tax year and submitted your Self-Assessment tax return for that year, on or before 23rd April 2020.
    • You must have traded in the 2019-20 tax year.
    • You must intend to continue trading in the 2020-21 tax year.
    • More than half of your income during 2018-19, 2019-20 and 2020-21 tax years must have come from self-employment.
  • Declares that they intend to continue to trade moving forward, and:
    • Is actively trading but is impacted by reduced demand due to coronavirus, or
    • Was previously trading but is temporarily unable to do so due to coronavirus.

If you trade through a limited company or trust, then you won’t be eligible for the SEISS extension.

How can I access it?

Applications aren’t open until 14th December 2020. HMRC will provide more guidance soon – we’ll keep this article up to date.

Bounce Back Loan Scheme extension

Coronavirus support: Tradesperson using laptop

What is it?

The government has introduced a new Pay As You Grow option, to allow all businesses that used the scheme to repay their loan over a period of up to 10 years, instead of the 6 years initially offered. This will cut average monthly repayments by almost half.

The extension also allows businesses to temporarily move to interest-only payments for periods of up to six months, up to three times. Repayments can also be paused entirely for up to six months, but only once and only after you’ve made six payments. 

If you haven’t applied for a Bounce Back Loan yet, then the application deadline has been extended until Monday 30th November 2020. The Bounce Back Loan offers SMEs that are negatively affected by coronavirus a loan of £2,000 to £50,000, capped at 25% of their total turnover. This will be based on the calendar year 2019, or new businesses can estimate.

No repayments need to be made for the first 12 months of the loan, and the government will cover the first 12 months’ interest payments. After 12 months, you’ll be charged a fixed 2.5% annual interest. You can read more details about the scheme on our Trade Advice Centre.

Who’s eligible?

UK businesses established before 1st March 2020, that are currently trading and have been negatively affected by coronavirus. Banks, insurers, reinsurers, public-sector bodies, further education establishments that are grant-funded and state-funded primary and secondary schools are excluded.

Your business must not have been ‘undertaking in difficulty’ on 31st December 2019. Also, if you’ve already secured a loan under the Coronavirus Business Interruption Loan Scheme, then you won’t be eligible. However, you can speak to your lender if you’d like to transfer a Coronavirus Business Interruption Loan of up to £50,000 into the Bounce Back Loan Scheme. This option is available until 4th November 2020.

How can I access it?

Applications are currently open until Monday 30th November 2020. Fill in the online form on the British Business Bank website to apply.

Coronavirus Business Interruption Loan Scheme deadline extension

Coronavirus support: Tradesperson looking at computer screen

What is it?

A loan of up to £5 million. The government has extended the repayment term to 10 years as part of the Winter Economy Plan, to help businesses that may be otherwise unable to repay their loan. The first 12 months of interest payments and fees are also covered by the government.

A successor loan guarantees programme is also being set up to start in January 2021.

Who’s eligible?

UK-based businesses with an annual turnover of less than £45 million. You must also:

  • Have a borrowing proposal that the lender would consider practical, if not for the coronavirus pandemic.
  • Self-certify that you’ve been adversely affected by COVID-19.
  • Not be classed as a ‘business in difficulty’, if you’re applying to borrow £30,000 or more.

How can I access it?

Applications have been extended to Thursday 31st January 2021. To apply, visit the British Business Bank website.

New Payment Scheme for VAT deferrals

2021 calendar

What is it?

Businesses which deferred their VAT due between 20th March and 30th June 2020 now have the option to spread their payments into 11 smaller, interest-free instalments until the end of March 2022. This replaces the original deadline of the end of March 2021.

Who’s eligible?

All businesses that used the VAT deferral option.

How can I access it?

You’ll need to opt-in to the New Payment Scheme once it’s put in place in early 2021. We’ll share more information on how to do this once HMRC releases more details.

Enhanced Time to Pay service for Self-Assessment taxpayers

Coronavirus support: HMRC Self-Assessment form

What is it?

A further deferral for Self-Assessment tax bills that were due on 31st July 2020. This means that these Self-Assessment tax bills won’t need to be paid until 31st January 2022. There’s no penalty for using this service.

Who’s eligible?

Anyone that’s self-employed.

How can I access it?

Use HMRC’s Time to Pay service to secure a payment plan.

Job Support Scheme

Coronavirus support: Pair of tradespeople working

What is it?

Replacing the Coronavirus Job Retention Scheme (also known as furlough) which is running from June to December 2020, the Job Support Scheme will be a government grant to help employers pay the full wages of employees that are working shorter hours. The scheme will begin in December 2020.

For each hour that an employee isn’t able to work, the employer and the government will each pay one third of the employee’s usual pay. The government contribution is capped at £697.92. So, the employee will get at least 77% of their pay, if the government cap isn’t reached.

You can claim both the Job Support Scheme and the Jobs Retention Bonus, which you can read more about in our Coronavirus: government support for construction businesses blog post.

Who’s eligible?

All SMEs are eligible for the Job Support Scheme.

To be eligible, employees must:

  • Be working at least 33% of their usual hours.
  • Not be on a redundancy notice.

As an employer, you must:

  • Have a UK bank account.
  • Have a UK PAYE scheme.

How can I access it?

The employer will be reimbursed in arrears for the government’s contribution. Further information on how to claim hasn’t been released yet. Keep an eye on this article for updates.

The team at Rated People are working hard to keep new job leads coming in. We’ve even seen a rise in demand for gardeners, painters, carpenters and more! Check out the latest job leads

For more information on the government support available for construction businesses during the coronavirus pandemic, head to our Trade Advice Centre.

Note: 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 from the relevant local authority.

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 – follow the government’s guidance on how to return to work safely.

Further coronavirus support from Rated People:


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