Financial help for cake makers
The situation around financial help for small businesses is changing rapidly and we will be updating this post as things change.
27/03/2020 updated with details of self-employment help scheme
21/03/2020 updated with contact details for the Chancellor & Tracy Brabin MP
20/03/2020 Post created
WHERE ARE THINGS AT THE MOMENT?
The government has finally announced how they will help the self employed. I have heard from a number of MPs that they were deluged with emails of concern from their constituents. So, well done to all of you who wrote to your MPs!
There are now four main ways you can get support. You can apply for all of these at the same time:
Self employment support grant
Universal Credits / Sick Pay
Deferral of paying self assessment taxes and VAT
Business interruption loans (but you need to pay these back!)
We’ve summarized what is available below. For a really comprehensive overview then Martin Lewis’s latest article is very thorough.
WHAT IS ON OFFER FINANCIALLY?
I have outlined below some of what is on offer. Anything with a ** next to it is particularly relevant to cake makers who work from home. You can read the governments full list of support for businesses here.
Self-Employment Income Support Scheme **
The government has announced support for the self-employed in the form of their Self-employment Income Support Scheme. To qualify you need to meet the following criteria:
You earn 50% or more of your income from self employment
You made less than £50K profit
You have submitted a 2018-19 tax return (if you’ve not done this yet do it by April 23 2020!
You have traded in 2019/20
What do you get and how do you get it?
The grant will be 80% of your average profits from the last 3 years (if you have not worked 3 years they will base it on the years you have worked) up to a maximum of £2,500. It will be paid in June and backdated for March to May.
You will be contacted by HMRC directly if you qualify so you do not need to apply.
VERY IMPORTANT
You can apply for Universal Credit at the same time
You can work during this time
Universal Credits and Sick Pay **
If you are self employed and fall ill you will be able to apply for sick pay through Universal Credits. This amounts to around £94 per week. You only get this if you are ill or are in self isolation.
The government have changed the qualification criteria for Universal Credit and so it may now apply to you. You can check what you would be eligible to by using this benefits calculator.
Grants for business that pay business rates
For cake businesses that pay business rates there are two levels of help.
£10K if you receive Small Business Rates Relief (SBRR)
£25K if you pay between £15K and £51K in business rates
Your local authority is administering these grants and should be getting in touch soon. You can read more details here.
Deferring paying you Self Assessment Taxes **
This is of direct benefit to self-employed people. If you are due to pay tax from your self assessment tax return then you can defer this. You will however need to pay it in 2021. More details here.
Defering paying VAT **
If you have VAT payments to make they are deferred until June 2020 and you will have till the end of 2020 to pay any outstanding amount off. More details here.
Government backed business interruption loans **
If your business is suffering financial distress you may be able to get a government backed loan. Sadly as it is a loan you will eventually need to repay it and for the self-employed this is a particularly unattractive option. You can read more using this link
Help in paying salaries of employees
For businesses that have employees that they pay as salaried employees who would be laid off there is support up to 80% of their salary. Unfortunately this is not relevant for most self-employed people.