Coronavirus in the UK has deeply impacted the business community, particularly the Small and Medium Enterprises (SME). Although coronavirus in the UK hasn’t been fatal in terms of mortality rate, the UK has its own battle to fight. As one of the strongest economies in the World, the sharp shifts in the UK’sstock market has hurt the economy like never before. The ongoing lockdown has only made things worse, especially for those employed by the SME Sector.
Over 99.9% of all businesses in the UK fall under the SME Sector, which is currently struggling to manage business overheads. In its attempts to support the economy, the UK Government has actively rolled out financial measures and support. If you run a small business or are Self-employed, and worried about paying your bills during the Coronavirus lockdown, then here’s all that you need to know to get yourself out of the mess.
Coronavirus in the UK and Economic Concerns
A vast majority of the working class in the UK are employed by the SME Sector, which is trying its best to get back on its knees. To help the SME Sector in its efforts, the UK Government has recently announced a relief package of £330 billion. If you are wondering how you can get your share of the coronavirus relief package, then we’ve got you covered. Here’s a quick breakdown of the financial assistance that SMEs and Self-Employed people can expect from the Government.
What Support Can Small Businesses Expect in the UK?
Small Businesses that pay salaries or wages would receive £330 billion in loan guarantees, which increases the borrowing limit for small businesses from £1.2 million to £5 million, under an exclusive scheme, called the Coronavirus Job Retention Scheme. These funds are granted to Businesses in order to help them retain their employees and uphold the economy.
All Employers and Agencies in the UK, that have created a PAYE account prior to the 28 th Day of March 2020 can apply for this loan. This facility is available to Public Authorities, Businesses, Charities, and Agency Workers paid through PAYE. So, if you have been furloughed by any of these organizations, then your Employer can make the necessary application and provide you relief up to 80 percent of your monthly salary, which is capped at £2,500. In fact, you would also qualify for benefits under this scheme if your Employer temporarily released you since 28 th February 2020 but hired you back.
Coronavirus Self-Employment Income Support Scheme
There has been a sharp increase in UK’s coronavirus cases, which has forced the Government to restrict social interaction, and enforce a lockdown. While those in full-time employment are being looked after through reliefs granted to Businesses, those in self-employment would be protected by the UK Government through the Coronavirus Self-Employment Income Support Scheme, which provides financial relief worth £9 billion exclusively to those who are self-employed. However, those who pay salaries and wages to others would be treated as a Business and would not qualify for the benefits available under the Coronavirus Self-Employment Income Support Scheme. At present, the scheme would remain active for the next three months but may be extended if cases of coronavirus in the UK persist.
With over 15 percent of the UK’s working population being Self Employed, this scheme provides some much-needed relief to those who have lost their livelihoods due to this unstoppable pandemic. To support these professionals, the Government has recently declared this scheme, which would cover close to95 percent of the self-employed people in the UK.
Who Qualifies for the Self-Employment Grant?
To qualify for the self-employment Grant, you must have been in self-employment prior to April 2019, with trading profits under £50,000 in any of the previous four years. Those who qualify can claim Grants up to 80 percent of their average profits for the previous three months, up to a maximum of £2,500 per month. This puts both employed and self-employed people on the same page. However, this is a taxable Grant, and the recipients would start to receive this financial aid only from June 2020.
How will the Self Employed receive this Benefit?
If you qualify to receive the self-employment benefit, then there is no need for you to contact the HRMC or any other Government Department. Instead, eligible persons would be identified and contacted bythe HRMC based on their Tax Returns. The HRMC would then invite you to fill in an application form, in which you can mention the Bank Account into which you wish to receive the Grant.
Banks and Financial Institutions in the UK
While the UK Government has been doing all that it can to shore up the economy, some of the leading Banks and Financial institutions continue to do their bit. Banks like Barclays, Santander, HSBC, and several others have begun inviting applications from its existing borrowers to apply for a 3-month mortgage payment holiday. In addition to that, some banks are also extending support in the form of interest-free overdrafts and other measures to help its customers combat coronavirus in the UK by staying indoors. Coronavirus in the UK has had an adverse impact not just on our health and social lives, but also on the London Stock Exchange. With stock prices continuing to plummet and businesses struggling to bring down their operating costs, things do not appear too promising in the near future. Nevertheless, the UK Government has been prepared for this and has introduced several economic welfare measures to safeguard the best interests of its citizens. Despite support coming in from all quarters, coronavirus in the UK is undoubtedly treading the path for recession.