Sick workers, disrupted supply chains, and reducing customer numbers are just some of the things that business owners have had to cope with during the last four months.

With many organisations struggling to keep their staff on payroll, HMRC has prepared various schemes and initiatives to support small and medium businesses. The protection of SMEs is regarded as vital as they account for over 99.9% of the UK's economy. To qualify for these schemes, a business must have less than 500 employees and not more than £90 million in turnover or £76 million in gross assets.

As the pandemic is a fluid situation, HMRC has had to adjust its approach in recent months. Here are the most important details SME owners should know on how the government is currently trying to help:

●      R&D Tax Credits: The most significant news regarding R&D Tax Credits is that the proposed cash credit cap for SMEs has been shifted from 1 April 2020 to 1 April 2021. The credit cap had been proposed in 2018 as a way to prevent abuse of the R&D tax credit scheme, which had been targeted at SMEs.

The new scheme would have limited the amount of payable tax credit businesses could receive to three times their total PAYE and NICs liability for the year of application. Business owners won't have to worry about that for another year, though.

In addition to that, R&D Expenditure Credit has been increased from 12% to 13%. Although they are typically targeted at large companies, SMEs subcontracted by large companies to do R&D can also apply for it.

●      Coronavirus Business Interruption Loan Scheme (CBILS): The CBLIS replaces the Enterprise finance guarantee scheme (EFG) as the government's loan initiative for SMEs. Under this scheme, through the British Business Bank, the government will be underwriting loans by up to 80% to encourage lenders to give loans to companies.

To be a beneficiary of this scheme, an organization will need to have an annual turnover of up to £45 million. The business will also have to prove that it would have been viable without the pandemic's effects.

●      Reclaiming Of Sick Day Costs: In encouraging companies and their staff to take their healthcare seriously, the government is offering to pay back the Statutory Sick Pay (SSP) paid to employees that have suffered from the effects of the Covid-19 virus. The scheme covers all kinds of employment contracts and is payable for up to two weeks of SSP.

However, an organization's claims cannot go beyond the state aid limits, which is capped at £800,000. The state aid limit is inclusive of other forms of government aid.

●      Coronavirus Job Retention Scheme: The government allows employers to claim wages for employees that have been furloughed due to Covid-19. If an organization has had to furlough employees for three consecutive weeks between 1 March and 30 June 2020, they can request a grant to cover part of the wages.

The deadline for applying for the grant, however, is 31 June 2020. After then, organizations will be required to contribute toward the cost of their furloughed employees' wages. However, publicly funded companies are advised not to furlough their staff but use the funds to keep paying them.

Keeping your business afloat during this trying period is essential. To that end, business owners must take advantage of as many grants and initiatives as they can. You can get more information about what the government is doing to help at their official website.