A specific set of measures to help self-employed people during the coronavirus outbreak has been announced by the Chancellor and can be found below.
Self-Employed Income Support Scheme
- Self-employed people who earn less than £50,000, obtain the majority of their income from self-employment, and have a tax return for 2019 are eligible for the Self-Employed Income Support Scheme.
- This scheme means that the Government will pay self-employed people a grant worth 80% of their average monthly earnings over the last three years, up to a value of £2,500 per month.
- Eligible individuals will be contacted directly by HMRC, who will pay the money into their bank account once a simple online form has been completed.
- More information about the scheme is available here: https://www.businesssupport.gov.uk/self-employment-income-support-scheme/ and a letter from the Chancellor which provides further details can be accessed in PDF format at the bottom of this page.
Accessing Universal Credit and Employment and Support Allowance
- If you are self-employed and a Universal Credit claimant you will now benefit from a £20 per week allowance increase.
- The standard 7 day wait requirement for Employment and Support Allowance has been removed, so it can be claimed from Day 1 rather than Day 8 of sickness or self-isolation.
- The Minimum Income Floor which currently applies to self-employed Universal Credit claimants is being suspended for 12 months for everyone from April 6th, so that any self-employed person who experiences a loss in earnings due to coronavirus will see that loss compensated for in their next month's Universal Credit award. This means that self-employed people can now access Universal Credit at a rate equivalent to Statutory Sick Pay for employees.
Income Tax Self Assessment payments (due in July this year) have been deferred until January 2021.
IR35 'Off Payroll Tax'
The government announced on 17 March that the reform to the off-payroll working rules (commonly known as IR35) - that would have applied for people contracting their services to large or medium-sized organisations outside the public sector - will be delayed for one year from 6 April 2020 until 6 April 2021. Business and individuals do not need to take any action in regard to this.
HMRC have scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress have outstanding tax liabilities. You can contact HMRC’s dedicated helpline to get practical help and advice on 0800 0159 559. For more information, please check the HMRC site here: https://www.gov.uk/government/news/taxhelpline-to-support-businesses-affected-by-coronavirus-covid-19.
A guide to claiming Universal Credit can be found here.
A guide to claiming Employment and Support Allowance can be found here.