Since it rapidly spread from Wuhan, China late last year, the coronavirus has quickly become a global issue. Along with the very real health risks that it has caused, it has also brought about a number of further unprecedented concerns and worries, particularly for people who run their own business. Across the world, the financial climate has changed rapidly, leaving sole traders rightly concerned about how they are going to manage to keep their business running – particularly those who rely on meeting with clients and customers face to face to sell goods or services.
Thankfully, there are now several resources and options available to UK sole traders to help them better navigate the current climate and provide some security in these uncertain times. If you are struggling to keep your business afloat during the COVID19 crisis, you may find some of the following useful.
A short-term loan can be an ideal option for sole traders who need instant cash to cover expenses. If you expect business to pick back up again in the future and simply need an injection of funds to pay your expenses for the month, a short-term loan could be the ideal solution. These loans are usually for a relatively small amount of money and can be repaid in full the next month or over a few months’ time, depending on what works best for you.
Payday UK is an excellent resource that you can use to help you find lenders offering direct payday loans to help you keep your business ticking over until things pick back up. You can use this site to find loans that you are likely to be eligible for and explore all of your options before deciding on the right one.
Many businesses rapidly switched to online-only services as a result of the COVID19 crisis. Restaurants, in particular, were quick to make the switch as eateries were forced to close down as the result of the national lockdown rules. And although the country is beginning to open back up and restaurants are now permitted to welcome diners back, they are still facing difficulties with many people concerned about their health deciding to stay at home instead. UK-based eCommerce companies like Shopblocks are offering quick set-up services for restaurants looking to get online fast with a website that allows them to take orders for food delivery.
Bounce back loans
Sole traders and small UK businesses who have struggled to stay afloat during the COVID19 crisis may be able to apply for a Bounce Back loan, which is designed to provide them with quick and easy funds to get their business back on track after experiencing unprecedented losses. The loans are available up to £50,000 and the cash usually lands in your business bank account within days, allowing you to get started on using it to repay any debts incurred over the lockdown period, or invest into marketing your business or putting extra safety measures in place to encourage customers to return. The loans are 100% government-backed and you can apply on the Gov.uk website with a simple online form.
If you have hired any employees, you may be eligible for the furlough scheme if your employees are unable to safely return to work or you have had to close your business down for an unprecedented amount of time. The furlough scheme is only available if you pay your employee a wage – you cannot claim it for anybody who works for you on a self-employed or freelance basis. The furlough scheme will cover your employees’ regular wages up to 80%, allowing you to free up cash while your business is struggling to bring in funds. You can choose to top up the wage to 100% yourself if you can afford to do so, but this is not necessary.
Defer self-assessment payment
If you are registered in the UK for self-assessment and are struggling to make your payment on time due to the impact of coronavirus, you can apply to defer your payment and get a little more breathing space to make it. If you choose to defer your payment, HMRC will not charge you any interest or penalties on any amount of the deferred payment. You will need to make the payment on or before 31 January 2021. You do not need to let HMRC know that you are deferring your payment, and choosing to do so will not affect your eligibility for any other coronavirus business support offered by HMRC.
If you have any overdue taxes that you are currently repaying in instalments, you will need to contact HMRC if you would also like to defer these. If you normally make payments via Direct Debit, remember to cancel the Direct Debit through your bank as soon as possible so that HMRC will not automatically collect any payments due.
Business rates relief
Due to the coronavirus crisis, some of the businesses that were most affected will no longer have to pay business rates for the 2020 to 2021 tax year. Eligible businesses include shops, restaurants, bars, cafes, pubs, cinemas, live music venues, sports clubs, gyms, spas, hotels, and guest houses. You can find the full list of eligible businesses at the Gov.uk website. You do not need to apply for this discount as your local council will automatically apply it for you. If you do not think that you are getting the relief that you are entitled to, you should get in touch with your local council.
Small business grants
Certain businesses in the UK are eligible for the Small Business Grant Fund (SBGF) which is designed to support small businesses with their costs during the coronavirus crisis. You are eligible for this grant if your business is based in England, occupies a property, and was eligible for small business rate relief on 11 March 2020. If you are eligible, you can receive a one-off cash grant of £10,000, provided by your local council. If you are an eligible business, your local council will get in touch with you with further details on how to claim your grant. You should get in touch with your local council if you think that you are eligible for the grant but have not yet received any information.
Self-employed income support scheme
If you are either self-employed as a sole trader or a member of a partnership, you can use these schemes to claim a grant designed to help you with business costs during the current crisis. If you are eligible for this grant and your business has been adversely affected by the coronavirus on or after the 14 July 2020, you must apply for the grant on or before 19 October 2020. The grant does not need to be repaid; however, it will be subject to the normal rates of income tax and self-employed National Insurance. Any self-employed person whose business has been negatively affected by the COVID19 crisis is able to claim. To be eligible, you will need to have traded and submitted Self-Assessment tax returns for the 2018/19 and 2019/20 tax years. HMRC will use your previous Self-Assessment tax returns to work out how much you are eligible to receive.
If you’re a sole trader who has been adversely impacted by the coronavirus, the good news is that you are not alone and there are several resources designed to help you out.
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