run business through a limited company

Lifetise coronavirus money help for freelancers and self-employed

Financial help and benefits if you run your business through a limited company

If you’re a contractor or freelancer who runs your business through your own limited company, we’re really sorry, but you are not entitled to government’s the Self-employed Income Support Scheme grant. That means that a lot of self-employed folks who have set up separate companies are stuck without as much help.

We know this is difficult, so let’s look at what financial help and benefits you could get.

Last updated: 14 April 2020

If you haven’t read our general guide to where to find financial help during this crisis, we recommend you read that too. Some of the advice (about help to pay your mortgage/rent, bills etc) will also apply to you.

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How to get money in

Would a Coronavirus Business Interruption Loan help you? You could apply for a loan up to £5 million to help you with cashflow. Read more here.

You can defer your tax payments. You can defer your March – June VAT payment and your July self-assessment tax payment. Read more here.

If you pay yourself a salary and you don’t need to work for the next few months. You can put yourself on furlough (leave) and get reimbursed 80% of your salary up to £2,500 a year. Appreciate that this may not be much if you pay only a basic salary and the rest in dividends. Read more here.

Check what benefits you could get. You might be able to get Universal Credit or other benefits. Check what you could get with EntitledTo’s benefits calculator.


Could a Coronavirus Business Interruption Loan help you?

If you operate your business through a business bank account (and not your personal account) then you could be eligible for a Coronavirus Business Interruption Loan (known as CBIL).

It’s designed to help small and medium businesses who are struggling for cashflow because of coronavirus and who might not be able to persuade their bank to give them a loan. With CBIL, the government gives the banks a guarantee, so it means banks are more likely to say yes to you.

How much can I borrow? Up to £5 million in a loan, overdraft, asset finance or invoice finance.

Do I need to give a personal guarantee / security? No if you’re borrowing £250,000 or less from one of the Big Four banks (HSBC, Barclays, Santander, Lloyds). Otherwise, it’s up to the lender.

Who is eligble? Your business must be based in the UK with a maximum annual turnover of £45 million. Your business also needs to be viable (i.e. it’s only the coronavirus pandemic that is causing your financial difficulty). It’s open to all types of busineses (including sole traders) as long as you get paid into a business bank account.

What are the finance terms? You could get up to 6 years to repay the loan (3 years for overdrafts and invoice finance). You won’t pay interest or fees to the lender for the first 12 months (the government pays those). Ideally look for the lenders who are not charging arrangement fees or early repayment charges.

How do I get it? You apply via one of the 40 approved banks and lenders listed here on the British Business Bank’s site. If your bank is one of the ones listed, you might find it easier and quicker to apply to them (but do check the terms they are offering compared to other lenders). We recommend applying online, as phone lines are incredibly busy.


Deferring your VAT and self-assessment tax payments

You can choose to defer your March – June VAT payment, and/or your self-assessment income tax payment.

How to defer your March – June VAT payment:

  • You still have to submit your VAT return, but you don’t have to make the payment until March 2021.
  • You don’t need to tell HMRC that you’re deferring – you just don’t pay (so if you normally pay by direct debit, you’ll need to cancel the direct debit).

How to defer your self-assessment income tax payment on account

  • If you have a payment on account due by 31 July, you can choose not to pay it until January 2021
  • You don’t have to tell HMRC that you’re deferring – you just don’t pay (so if you normally pay by direct debit, you’ll need to cancel the direct debit).

If you’re struggling to pay any taxes, then you can always call HMRC to agree a payment plan and extra time to pay:

HMRC tax helpline: 0800 0159 559

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Coronavirus money help for freelancers and self-employed
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