COVID-19 – What about if I am self-employed?
With the number of self-employed who are being affected by the financial implications of coronavirus being estimated at around 5 million, this article answers some of the key questions that you may be asking if you are self-employed.
Can I access the Job Retention Scheme which the government announced?
No, at present those who are self-employed cannot access the Job Retention Scheme. However, you can access the Self-employment Income Support Scheme (SEISS). This is for Self-employed individuals (including members of partnerships) and is a grant worth 80% trading profits up to a maximum of £2,500 per month for next 3 months. There are a number of things you need to satisfy but the key ones are:
It will be paid direct into your bank account in one instalment and HMRC will contact you if you are eligible. It is likely to be up and running by June 2020.
What finance can I access?
The self-employed can now access in full universal credit at a rate equivalent to statutory sick pay for employees.
Also, it has been confirmed that sole traders and free-lancers can (subject to satisfying the other application criteria) apply for help under the Coronavirus Business Interruption Loan Scheme. See here for more details.
The government also announced a number of grants, and it seems these are also available potentially, See here for more details.
How much is statutory sick pay?
The current statutory sick pay rate for employees is £94.25 per week of statutory sick pay for up to 28 weeks. The money will be payable from day one instead of day four for affected individuals.
Can I apply for state benefits?
Broadly, when it comes to working out which benefits you are eligible for and how much you might get, the same rules usually apply whether you work for an employer or are self-employed. It’s not a straight-forward application process and you should start the process sooner than later. The charity Turn to Us has a useful resource page here.
What is the minimum income floor which the Chancellor mentioned?
The minimum income floor is the amount the Department for work and Pensions uses to set your universal credit payment each month. It’s effectively a financial assumption about the income you have coming in each month. The government has said this is temporarily removed so the self-employed are now treated the same as the employed within the universal credit process. More information is available here.
Will I still be expected to pay my tax?
Yes, but the Chancellor has said he will defer the next round of self-assessment payments on account to January 2021. They were originally scheduled for 31 July 2020.
If you happen to be registered for VAT (earning over £85,000), then VAT for the next VAT quarter has been deferred too.
What about my mortgage?
The Chancellor said anyone in difficulty due to coronavirus will be offered “at least a three-month mortgage holiday” from their repayments. However, we have no further details on how this is expected to work and we urge people to speak to their lenders if they are struggling to pay their mortgage.
Protection from eviction for non-payment of rent to 30 June 2020 for those renting property has also been announced.
For more information please contact the employment team on 01254 828300.