10 things you should know to help your small business survive the next 3 months

We've drawn together a shortlist of the 10 things your company needs to keep an eye on now so it can weather out the ongoing storm of uncertainty.

Every UK business, big or small, needs to respond to the extraordinarily rapid and dizzying developments of the past few weeks.

Many small businesses are feeling battered and bruised, and for many of them, uncertainty isn't going anywhere. So, it's essential not to look too far ahead but focus on what you can control. There are initiatives out there as well as proactive steps that you can take to keep your business afloat and protect yourself financially, even if many things seem up in the air.

It's essential to keep track of the help that's available and target those short- to medium-term adjustments that will give you the best chance of survival.

Summon the right spirit

The UK government has clearly defined that it wants self-employed sole traders and small businesses to ride out the storm and ultimately thrive. But despite the language that's been used, this isn't a Churchillian call of, 'whatever the cost may be'. The offered help isn't necessarily straightforward or available to everybody. Not every business is going to receive the help they need. Neither will all be sufficiently equipped to make it to the other side - government subsidies will not go on forever.

However, making the best arrangements now means you're more likely to have a business in three months, or six months. While we cannot predict how long the current situation will last, it's worth reminding ourselves that this is temporary. When you're finally ready to open your business again, the initial uptick in customer demand is going to be huge. And you need to be prepared.

So let's have a look at ten things - mechanisms, tips and steps - you should know about to make sure your small business is there for the bounce-back.

1. The Coronavirus Self-Employed Income Support Scheme (SEISS)

SEISS is the flagship scheme for sole traders. If you've been making more than 50% of your income from self-employment in the last few years, but are no longer able to take work, HMRC will be getting in touch about how you can claim up to 80% of your monthly earnings (for three months, up to £2,500 a month) to keep your business alive.

You won't need to pay this back, but there is some small print. The scheme will not apply to individuals trading through a limited company (keep reading for more on that), and you will have to wait. Payment will come in a single lump sum by mid-June (backdated to the start of March).

The delay is partly due to the need to root out any fraudsters, allow the right people access to the maximum amount of help available.

You can use the scheme if ALL of the following apply:

You have been trading in 2019-20 and are trading when you apply, or would be were it not for COVID-19.
You intend to trade in the 2020-21 tax year.
You have lost trading/partnership trading profits due to COVID-19.
You have filed a Self Assessment tax return for the 2018-19 tax year (if not, you now have until 23rd April 2020).
Your trading profits were below £50,000 in 2018-19, or your average trading profits over 2016-17, 2017-18 & 2018-19 were below £50,000.
More than half of your average total taxable income came from your self-employment business over these tax years.

You can access the scheme by:

Waiting for HMRC to contact you. They will identify eligible taxpayers and send a form for your approval, together with further guidance.
Completing your 2018-19 self-assessment tax return if you haven't already done so. Remember, you now have to 23rd April to do so.

You cannot access the scheme if you:

Have filed average a self-employed profit over £50,000 during 2016-17, 2017-18 & 2018-19, or if you were only trading during 2018-19 and your profit exceeded £50,000.
Have a self-employed income that's less than 50% of your total taxable income from all sources during the above tax years.
Own a limited company, draw a salary and dividends
Are newly self-employed (started trading after 6th April 2019)

2. The Coronavirus Business Interruption Loan Scheme (CBILS)

It may have an awkward name, but CBILS will temporarily support small and medium-sized businesses with lending, overdrafts and invoice finance, guaranteeing 80% on each loan. A government-backed Business Interruption Payment will cover the first 12 months of interest payments and any lender fees, so smaller businesses will benefit from no upfront costs and lower initial repayments. The scheme will use 40 accredited commercial lenders, including all major banks.

You will be eligible for the scheme if you have a business based in the UK, with a turnover of less than £45 million a year. To apply, you should talk to your bank. There are currently reports of delays on the phones, so be patient or return to this after looking at some other packages first.

3. Business Rates relief

Retail companies in England with rates below £51,000 won't have to pay any business rates until 31st March 2021. It's expected that this will apply to up to 90% of independent shops, pubs, restaurants and other similar businesses. A rates payment holiday is available for the 2020-2021 tax year and is automatic from April 2020 onwards. New council tax bills will be issued to exclude the business rates charge.

In addition to the above, a cash grant will be given to these companies as follows:

£10,000 for each property with a rateable value of under £15,000
£25,000 for each property with a rateable value of between £15,001 and £51,000

You shouldn't have to contact your local council about this as they will contact you.

Businesses that pay little or no business rates because they have been eligible for Small Business Rate Relief (SBRR) or Rural Rate Relief (RRR) will be eligible for a one-off grant of £10,000. This grant is an automatic relief applicable to all business sectors. Your local authority will contact you if you qualify.

This could be a lifesaver for particularly hard-hit sectors of the economy. If you think you are due relief or a grant but haven't yet been contacted, you should contact your local council.

4. Mortgage and rent payment holidays

You don't have to have lost your job to claim a mortgage repayment holiday. If you've been financially compromised by the Coronavirus crisis in any way (as many have), you can negotiate a repayment holiday of up to three months, usually by completing a simple online form through your mortgage lender.

If you rent through a private landlord, ask them if they'll consider passing a rental payment holiday on to you if they're taking a mortgage holiday. When seeking any 'holiday' from a payment schedule, make sure you check that your credit rating won't be adversely affected.

5. Credit Card payment holidays

We're seeing credit card companies being increasingly proactive. Many are contacting customers directly with offers of payment holidays. Taking them up on this can reduce your outgoings, but do be aware that interest may continue in the meantime, your credit rating may be affected, or you may be prevented from using your card during the period. Only you will know if this is the right move, so make sure you check any details with your credit card company.

6. Universal Credit

All self-employed workers who contract COVID-19 or need to self-isolate can make a claim for Universal Credit, as the minimum floor has been temporarily removed. If you're unable to gain support through any of the initiatives mentioned above and are unable to work, you should also consider applying for Universal Credit.

7. HMRC's Time to Pay Service

Businesses can apply for a three-month extension for filing their accounts (the clock started on 25th March). This is open to companies and individuals that are struggling to pay your tax on time. Under the Time to Pay Service, you can agree to pay HMRC in instalments to spread the cost of your next tax liability. You or your business will be eligible if you have an existing tax liability, and are struggling to make a payment due to the effects of the Coronavirus crisis on yourself or your business.

As part of these measures, while companies still have to apply for a three-month extension, those with issues around COVID-19 will be automatically and immediately granted an extension. The fast-track system takes around 15 minutes to complete online. You can start it here: https://beta.companieshouse.gov.uk/extensions

Some things to be aware of:

You should call the HMRC Coronavirus Helpline on 0800 015 9559 if you can't pay your tax because of coronavirus and need some general advice
You should call the Self Assessment Payment Helpline on 0300 200 3822 if you have filed your tax return, owe less than £10,000 but will struggle to pay the full liability on time.
If a Time to Pay agreement is reached, you will need to pay your tax via Direct Debit from your bank account. Have details ready when you call.
If you miss any payments or do not settle your tax bill immediately with HMRC when they haven't agreed on a payment plan, they could take action against you
Interest will continue to accrue on late tax payments.

If you're due to pay a Self Assessment payment on account by 31st July 2020, but the impact of the coronavirus causes you difficulty in making payment by that date, you can defer payment until January 2021. This is an automatic offer with no application required. No penalties or interest will be charged if you defer payment to 31st January 2021.

8. Event cancellation insurance

One of the most obvious effects of the shutdown is the cancellation of meetings and events. Businesses with event cancellation policies that include unspecified notifiable disease extensions should be able to claim for unavoidable cancellation if it was after 21st March 2020. That's when the government asked businesses to shut down. If you've had to cancel a major event, the insurance was probably bespoke, so check the t&cs of your specific policy and contact your broker.

9. Support for businesses through deferring VAT payments

HMRC will support enterprise by delaying Valued Added Tax (VAT) payments for three months. If your business is UK VAT registered business, and you have a VAT payment due between 20th March 2020 and 30th June 2020, you can:

Defer the payment until a later date
Pay the due VAT as normal

Defer your VAT payment now

10. Help is available

If you run a business or are self-employed and are concerned about paying your tax due to coronavirus, you can call HMRC's helpline on 0800 024 1222. We're here to help too. Amaiz is waiving all fees on both our plans (that's free transactions for everyone) for April, and that includes extending free trials for our newest companies. We've also introduced Additional Access which means you can grant remote access to your Amaiz account to your accountants or business stakeholders during the lockdown.

What if I'm newly self-employed?

If you started trading after 6th April 2019, there is limited direct support available, but you should look at help with mortgage, rent or credit cards as detailed above. You may well be entitled to Universal Credit, but you should keep careful records and be ready to file your Self Assessment record as early as possible. If coronavirus continues to impact your ability to do business past 2020-21, you may be included in the above schemes retrospectively.

What if I contract through a limited company?

Owner directors of limited companies aren't included in the direct measures above. This is partly because a distinction has been drawn between someone who operates a business under their name as a sole trader and someone who runs a company and takes a salary, extracts profits via dividends, or does both.

There is some better recent news, though. Private company owners who operate on their own, perhaps via a Personal Service Company, and who have no employees, can now be included in the Job Retention Scheme under the furloughing provisions provided they have been paying themselves a salary via a PAYE scheme.

If you fall under the category of 'furloughed director' you will only be able to carry out your statutory duties, and not undertake any work that generates revenue. However, you may well be able to earn from employment elsewhere. If you're a company director who has only been paying themselves in dividends, you won't be included in the scheme.
If you're office-based and in the service industry (as an IT or media contractor, for instance), the message is to continue working from home where you can use video conferencing.
You no longer have to over-worry about falling foul of IR35. The changes planned to affect the private sector this year have delayed for a year. Make sure you check terms of contract for any work you take on but don't let this put you off getting out there and chasing down work.

We will continue to hunt for more answers and keep up to date as measures roll out. If you would like to share your experiences or talk to us about your situation, our team is here to listen.

Our Customer Care team is available in-app 24/7, and you can always find the latest from Amaiz on Twitter and Facebook.