COVID-19: Guidance for the Self-Employed
NEW: For a clear overview of all support available, who is eligible and what you have to do, see A Brief Guide to Support for Businesses and Self-Employed Affected by the Coronavirus Crisis
Sunak’s new Self-Employed Income Support Scheme
- Self-employed will now be able to receive a taxable grant worth up to 80% of your average monthly profits, up to a maximum of £2,500 per month.
- This is equivalent to the amount received by furloughed employees on the Jobs Retention Scheme.
Though those who pay themselves a salary and dividends through their own company are not covered by the scheme, they will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.
Who is eligible for the scheme?
- Only open to anyone with trading profits up to £50,000 per annum (no suppport for those earning more than £50,000)
- You must make the majority of income from being self employed and you must still be trading
- Only open to those already registered as self-employed and who have a tax return for 2019 (i.e. you are not eligible if you became self-employed after April 2019)
- If you are late filing your tax return for 2018/2019, you must do so in the next 4 weeks in order to qualify.
- Average profits are calculated from your last 3 tax returns (or whatever is available)
These grants will cover 3 months of income (March-May) and the government may extend this if necessary.
They will be paid no later than June, and like the other grants, you do not have to do anything. If you are eligible, HMRC will contact you. You will be required to complete a simple form and the grant will be paid directly into your bank account.
However, his parting line was that if we all want to access the support equally, we must all pay in equally. This implies that tax reforms will follow that may remove the tax advantage of being self-employed.
What Else is Available?
- Self Assessment payments due in July will be deferred until Jan 2021
- Universal Credit: the minimum income floor will be suspended for everyone affected by coronavirus. This means self-employed people will be able to access Universal Credit. equivalent to statutory sick pay
- Universal Credit standard allowance will be increased by £1,000 for the next 12 months as will Working Tax Credit
Mortgage Holidays & Rent
Anyone affected by the coronavirus will be able to secure a 3 month mortgage break. But you must speak to your lender first.
For renters, the government has announced an increase in houseing benefit and introduced a ban on evicting renters for 3 months and landlords are also able to take the 3 month mortgage break.
Extended Credit, Loan Breaks
Many banks are emergency credit card increases, larger cash withdrawals etc to help customers make it through the coronavirus scare. Check with your bank to see what they can offer
Bills, Utilities & Council Tax
Richmond Council has said they will not take enforcement action if residents are temporarily unable to pay their council tax. If that is your situation, contact your local council to come to an agreement. Speak to your utility providers about payment structures if you can’t pay your bills (see links below)
Useful Links & Numbers
- Advice page from IPSE (Association of Indpendent Professionals and Self-Employed)
- Benefits Calculator from Turn2Us
- Universal Credits
- Citizen’s Advice offers advice on what to do if you can’t pay your bills.
- Ofgem page outlining what to do if you can’t pay your energy bills.
- HMRC telephone number is 0800 015 9559