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COVID-19 grants

Shoemaking. Photo by Nick Fleming.

Photo by Nick Fleming

These grants are now closed to applications. We may open the scheme again if more funding becomes available.

The Heritage Crafts Association (HCA) is offering grants of up to £500 for craftspeople operating as sole traders and small businesses to invest in something that will help make their business more sustainable during the COVID-19 pandemic (and in the months that follow) or to ‘bridge the gap’ until future income can be secured.

Based on the result of our recent sector survey, crafts businesses are being particularly hard hit by the economic implications of the crisis, so this fund has been set up to help small crafts businesses access new markets, trial new ways of operating, or keep them afloat until they can be more sustainable.

Examples might include (but are not limited to) investing in:

  • market research and development of products suited to the emerging economy;
  • tools and equipment to make new products;
  • targeted advertising to reach out to new markets;
  • improved online presence to develop the mail order side of your business;
  • training and skills development;
  • developing online teaching/workshops as an income stream; or
  • paying the bills until a time when applicants have reason to believe that business will improve.

Applications will be considered based on the potential of the idea to develop new ways of working that will improve craftspeople’s sustainability during difficult times or to ‘bridge the gap’ until future income can be secured. As well as the grants, the HCA has some capacity to provide advice and guidance to help applicants make their idea a reality.

The initial deadline for applications is Friday 15 May 2020 at 5pm. Funds are limited, so unsuccessful applicants from this round may be contacted again in future if more funding is secured later, to ask if they want their applications to be reassessed in future rounds.

Applicants must:

  • be heritage craftspeople (practising a craft that requires a high degree of hand skill and has been practised in the UK for two generations or more, including migrant crafts);
  • demonstrate how they will use the grant to make their business more sustainable during and after the COVID-19 pandemic or to ‘bridge the gap’ until future income can be secured;
  • be HCA members or indicate in their project plan that they will allocate part of their grant to a year’s membership (£20 for members and £40 for small businesses); and
  • not have received funding of more than £500 from the HCA in the last 24 months.

These grants are now closed to applications. We may open the scheme again if more funding becomes available.

Accessing financial support during COVID-19

Gerald Monaghan, blacksmith (photo by Philip Utton)

Gerald Monaghan, blacksmith (photo by Philip Utton)

The heritage crafts sector, which is predominantly made up of self-employed craftspeople and micro-businesses, is going to be particularly hard hit by the COVID-19 (coronavirus) pandemic, as retailers experience a drop in footfall and selling events are cancelled all around the country.

Our survey in April/May 2020 showed that:

  • 73% of respondents were at reduced capacity or were unable to work as an indirect result of COVID-19;
  • 71% believed their turnover would reduce by more than half; and
  • 56% believed there’s less than a 50:50 chance of their business surviving the next six months.

The guidance below is provided to let heritage crafts businesses know what help is available, and will be updated as things change. Please let us know if there is any support you are aware of not listed here and we will share the details.

We need to know what you would like us to focus on in our support and advocacy in the coming weeks. Please let us know.

 

Self-employed craftspeople

  • Self-employed income support scheme – the Government will provide a taxable grant of 80% of a self-employed person’s earnings up to a maximum of £2,500 month, eligible for those with trading profits of up to £50,000 who make the majority of their income from self-employment. You do not need to prove coronavirus impact and you can keep working and still benefit from the scheme. Earnings are calculated as an average over the past three years and based on net profits, i.e. the amount you declared for tax after you’d taken off expenses but before you were taxed. People can apply directly to HMRC for the grant when the scheme is operational, using an online form, and the grant will be paid directly into their bank account. The scheme will run for three months in the first instance and be available ‘no later than June’, though it will be backdated to March.
  • Universal Credit for the self-employed – the minimum income floor for Universal Credit has been suspended. This means self-employed people out of work as a result of the COVID-19 can now access, in full, Universal Credit at a rate equivalent to Statutory Sick Pay for employees (£94.25 per week for up to 28 weeks). The money will be payable from day one instead of day four. In addition, the Universal Credit standard allowance and the Working Tax Credit basic element will both increase by £1,000 a year for the next 12 months.
  • Support for self-employed people paying tax – the next round of self-assessment payments on account (originally scheduled for 31 July 2020) have been deferred to January 2021. Additionally, all businesses and self-employed people in financial distress with outstanding tax liabilities may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.

 

Small craft businesses

The Chancellor has introduced a package of measures to support businesses including:

  • Coronavirus job retention scheme – companies and organisations will be able to apply for a grant from HMRC to cover 80 per cent of the wages of people, up to £2,500 a month, who are not working due to the coronavirus. The grant will be backdated to 1 March and available from April. 12 May update: The job retention scheme has been extended until until the end of October. From August to October the scheme will allow part time working to gradually re-introduce employees back into the workplace. Full details of changes to the scheme will follow by the end of May.
  • Statutory sick pay relief package for small and medium sized enterprises – this means that, from the day after new regulations come into force, businesses will be refunded up to two weeks Statutory Sick Pay per eligible employee who has been off work because of COVID-19. Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a note from their GP.
  • VAT deferral – the next quarter of VAT payments due from businesses have been deferred, meaning that no business will pay VAT from now to June, and they’ll have until the end of the financial year to repay those bills.
  • Business rates holiday – for small businesses in England that have retail premises, there will be a 12-month business rates holiday for the 2020 to 2021 tax year.
  • Grants for rate-paying businesses – Small businesses that have retail premises with a rateable value between £15,000 and £51,000 should receive grant funding of £25,000 to help meet their ongoing business costs. Small businesses that already receive Small Business Rate Relief (SBBR) or rural rate relief will be eligible for grant funding of £10,000. Enquiries about these grants should be directed to your local authority.
  • Business Interruption Loan Schemethis new scheme, delivered by the British Business Bank, will launch in late March to support small businesses to access bank lending and overdrafts. The government will provide lenders with a guarantee of 80 per cent on loans of up to £5 million in value. The first 12 months will be interest free, with payments covered by the government.
  • Support for businesses paying tax – all businesses and self-employed people in financial distress with outstanding tax liabilities may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.

 

Small craft businesses in Wales

The Welsh Government has published details of its £1.4 billion business support package to help businesses across Wales.  In addition, the Development Bank of Wales will be offering all its business customers a three-month capital repayment holiday.

 

Facebook Small Business Grants Program

Facebook will be offering $100 million in cash grants and ad credits to help up to 30,000 eligible small businesses. The company will begin taking applications in the coming weeks and you can sign up to receive more information when it becomes available.

COVID-19 crafts business survey results

In April 2020 we carried out a survey among heritage craftspeople on their businesses outlook during the COVID-19 pandemic. The survey showed that:

  • 73% of respondents were at reduced capacity or were unable to work as an indirect result of COVID-19;
  • 71% believed their turnover would reduce by more than half; and
  • 56% believed there’s less than a 50:50 chance of their business surviving the next six months.

 

Summary of findings – 4 May 2020

Respondents:

  • 84% sole traders or freelance contractors.
  • 6% small business owners.
  • This is broadly reflective of the overall makeup of the heritage crafts sector as shown in Mapping Heritage Crafts (2012).

Current situation as a result of COVID-19:

  • 19% still working at normal levels.
  • 38% at reduced capacity.
  • 35% unable to work as a result of business (as opposed to health) factors.
  • This means that 73% are at reduced capacity or are unable to work as an indirect result of COVID-19.

Turnover forecast:

  • Only 4% of people believe their turnover will remain stable.
  • 71% of people believe their turnover will reduce by more than half.
  • 41% of people believe their turnover will reduce by more than three quarters.

Prognosis:

  • Only 24% of people believe there’s more than a 75% chance of their business surviving the next six months.
  • 56% of people believe there’s less than a 50% chance of their business surviving the next six months.

Sales/commissions issues:

  • 92% of people are currently experiencing problems selling their work or getting commissions.
    The most cited reasons for this was the cancellation of selling events, exhibitions and festivals and restrictions on one-to-one teaching.
  • Some respondents were unsure about whether they are supposed to us the postal system for sales.

Supply chain issues:

  • 38% of people are currently experiencing supply chain problems impacting on their business.
  • Clay, wool, animal hair, timber, metal, metal thread, tools, and packaging materials have all been reported as being in short supply.
  • Some respondents harvest their own materials, but are unsure whether this constitutes essential travel if their businesses are reliant upon it? One respondent is uncertain about using a chainsaw for fear of increasing the load on the NHS in the event of a work accident.

Government support:

  • Only 4% of respondents are currently in receipt of the Government support on offer, either being furloughed or claiming Universal credit.
  • 30% are not yet in receipt of Government support but intend to make use of it, though more than one respondent said that this will not provide enough income to live on.
  • 28% are unsure of whether or not they qualify for Government support. Reasons for the uncertainty include not having high enough turnover, having another part time job or a pension supplementing their income, and the fact that they have been told not to contact HMRC but to wait to be contacted. We have given advice and guidance for those who provided contact details.
  • 31% believe that they are ineligible for government support. The reasons include being a new company that is yet to file a tax return, having savings in the bank, having a partner earning over a certain amount, and working from non-rated premises.

Key needs:

  • Reassurance that the Government recognises and values this sector, and that crafts practitioners will be eligible for support.
  • Support needs to come quicker. Many businesses won’t survive until June.
  • In cases where support is deferred, an eligibility check now would help ease uncertainty and stress.
  • 12% of respondents requested a form of Universal Basic Income for all citizens rather than the current system which allows certain individuals and businesses to fall through the gaps. This was not prompted by any of the survey questions.
  • Extra money should be made available for critically endangered crafts where the fate of an at-risk craft relies on few individuals and/or businesses.
  • The Employee Retention Scheme should be based on tax returns rather than ePAYE for those companies that do not use the latter.
  • The Employee Retention Scheme should be extended to Company Directors of small companies, many of whom are in the same position as the self employed.
  • There should be more loan repayment and business rate holidays.