Help for the self-employed during Coronavirus outbreak explained
Almost 5 million people are self-employed, working out at 15% of the UK workforce so we wanted to explain the help for the self-employed during Coronavirus outbreak.
The government faced criticism over announcing significant help for businesses and employees impacted by the coronavirus.
On Friday, March 26 it also unveiled a scheme for the self-employed.
The scheme allows certain (95% of) freelancers and partnerships to apply for a grant of up to £2,500 a month.
Here are the vital things to know right now if you are self-employed.
Look into the government grant
Self-employed workers or partnerships that have suffered a loss of income due to the coronavirus will be able to apply for a grant worth 80% of their average monthly profits over the past three years. It is capped at £2,500 a month.
Initially the cash will be available for three months in a single lump sum payment and will probably only start to be paid in June at the earliest.
The ‘Coronavirus Self-employment Income Support Scheme ‘is open to those who were trading in the last financial year, still trading now, and planning to continue doing so this year.
Chancellor Rishi Sunak said it will cover 95% of the self-employed who make most of their money from self-employment.
These are the criteria that the self-employed must meet to be eligible:
- More than half of a claimant’s income needs to come from self-employment
- They must have a trading profit of less than £50,000 in 2018-19, or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2017-18.
- They must have a full year of accounts – those who do not will not be eligible
- If you pay yourself a salary and dividends through your own company, you won’t be covered by the scheme. However, you may be able to apply for the Coronavirus Job Retention Scheme if you are operating through PAYE.
If you are interested in applying for the self-employed scheme, you don’t need to do anything right now. The government says HM Revenue & Customs (HMRC) will identify those eligible and invite them to apply.
Self-employed people aren’t entitled to statutory sick pay, so the government has promised that if you are sick or have been advised to self-isolate, you will be able to claim employment and support allowance (ESA) from day one instead of day eight. How much you get depends on factors such as your age and what stage your application is at, but the maximum payout is £111.65 a week.
The minimum-income floor for those on universal credit has also been temporarily removed.
Check out the government website if you have never claimed before and need to know how to get started.
Managing your invoices is an essential part of being a freelancer. As companies struggle to come to terms with the impact of the coronavirus on their business and way of working, paying freelancers for past work may not be top of their agenda. But ensuring you have cash in the bank is top of yours, so don’t be shy!
Don’t worry about tax
The government has delayed tax payments through the self-assessment system by six months. This means the self-employed won’t need to pay their income tax bill due in July 2020 until January 2021.
HMRC has also set up a special helpline (0800 024 1222) for businesses and the self-employed who are concerned about paying their tax due to coronavirus. It is open Monday to Friday 8am to 4pm.
Please speak to us at the Hollies Bookkeeping if you requote clarity, guidance or help with any of the above. Now is the perfect time to get onto of your accounts and make sure you keep it up. Although we are working from home, we are still working. Contact us on 07981 849571 or email Info@holliesbookkeeping.co.uk