New measures for self-employed during the Coronavirus crisis

THE Chancellor has announced a ground-breaking support scheme to help the self-employed – which include dozens of Safe Local Trade members – during the coronavirus crisis.

In the latest step to protect individuals and businesses, Rishi Sunak has set out plans that will see the self-employed receive up to £2,500 per month in grants for at least three months.

Millions of people across the UK could benefit from the new Self-Employed Income Support Scheme, with those eligible receiving a cash grant worth 80 per cent of their average monthly trading profit over the last three years.

This covers 95 per cent of people who receive the majority of their income from self-employment.

This brings parity with the Coronavirus Job Retention Scheme, announced by the Chancellor last week, where the Government committed to pay up to £2,500 each month in wages of employed workers who are furloughed during the outbreak.

Cleaners, plumbers, electricians, musicians, hairdressers and many other self-employed people who are eligible for the new scheme will be able to apply directly to HMRC for the taxable grant, using a simple online form, with the cash being paid directly into people’s bank account.

So – what do you need to know?

• If you are self-employed, you won’t be able to claim statutory sick pay. To ensure that self-employed people have some financial support if they are unwell, self-isolating or otherwise unable to work as normal during the outbreak, the rules for claiming Universal Credit have been relaxed. Government has suspended the ‘minimum income floor’, the earnings threshold used to work out whether you can receive benefits and how much you should receive. This means self-employed people will now be able to access Universal Credit. The amount they can receive is equivalent to the statutory sick pay rate.

• Employment and Support Allowance will be paid to eligible people from the first day they are sick, rather than from day eight. Find out how to make a claim for benefits during the outbreak.

• Under the self-employed income support scheme announced on 26 March, you will be able to claim a taxable grant of up to 80% of your average monthly earnings, up to a maximum of £2,500 per month. This will be open to anyone with trading profits up to £50,000 a year and will be based on your tax returns over the past three years. If you’ve been self-employed for less than three years, an average will be taken from the tax returns you’ve submitted up to 31 January 2020.

• Mortgage lenders are arranging three-month ‘mortgage holidays’ for those in financial difficulty due to COVID-19. Renters will be able to get contributions towards their rent from local housing allowances. 

• Self-assessment tax payments normally paid midway through the tax year (known as ‘payments on account’) have been deferred until January 2021. You might also be able to get help from HMRC if coronavirus affects your ability to pay any taxes that you owe.

For more information on all the Government Support available for self-employed, go to: 

https://www.gov.uk/government/collections/financial-support-for-businesses-during-coronavirus-covid-19