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Government coronavirus support measures for self-employed

(unable to work due to having Covid-19/self-isolating in line with Government guidance)

If you cannot work due to having Covid-19/self-isolating in line with Government guidance

Self-employed Income Support Scheme

Summary

Self-employed people will be able to apply for a grant worth 80% of their average monthly profits over the last three years, up to £2,500 a month.

At least half their income needs to have come from self-employment as registered on the 2018-19 tax return filed in January – anyone who missed the filing deadline has four weeks from now to get it done and still qualify.

The money, backdated to March, will arrive directly into people’s banks accounts from HMRC, but not until June.

The grants will be taxable, and will need to be declared on tax returns by January 2022.

Company owners who pay themselves a dividend are not covered ((though they can use the Job Retention Scheme if they operate PAYE schemes).

Who is Eligible?

The scheme is open to those who earn under £50,000 a year on average over last three years.

Unlike the employee scheme, the self-employed can continue to work as they receive support.

How to access this?

You’ll have to fill out a form (HMRC may contact you directly).

HMRC will pay the grant directly to bank accounts.

Anyone who missed the January filing deadline has an extra 4 weeks from today to submit their tax return.

‘New Style’ Employment Support Allowance

Summary

‘New Style’ ESA may be payable to people, whether employed or self-employed, who have a disability or a health condition which affects how much they can work (such as coronavirus). This is as long as they have paid enough national insurance contributions in the last two to three years.

Who is Eligible?

To get ‘New Style’ ESA you usually need to have been working within the last 2 to 3 years, and have made (or been credited with) Class 1 or Class 2 National Insurance contributions.

This can be through employment or self–employment.

You will also need to have a fit note (sometimes called ‘sick note’ or ‘doctor’s note’) but you can start making your claim before you have one. If you have only just become ill you can self–certify for the first 7 days. [This is not currently the case due to Covid-19 but exact procedure is evolving so just call helpline to ask].

You cannot claim ‘New Style’ ESA or UC if you get the Severe Disability Premium (SDP), or are entitled to it, or if you got or were entitled to the severe disability premium in the last month, and you’re still eligible for it. You might be able to claim other benefits. More information: https://www.gov.uk/guidance/new-style-employment-and-support-allowance#eligibility

How to access this?

See ‘How to claim’ section on this site

If you cannot work

Universal Credit (UC)

Summary

For most self-employed UC claimants, after they have been self-employed for a certain period (usually 12 months, with certain exemptions) awards are calculated as if they earn national minimum wage for the number of hours they are supposed to work. This is even if their actual income is lower than this. While there is currently a 5-week wait for UC, you can get an advance on your first payment (which you will have to pay back later) which should mean you get support much quicker.

Who is Eligible?

You may be able to get Universal Credit if:

  • you’re on a low income or out of work
  • you’re 18 or over (there are some exceptions if you’re 16 to 17)
  • you’re under State Pension age (or your partner is)
  • you and your partner have £16,000 or less in savings between you
  • you live in the UK.

How to access this?

Universal Credit explained here

and more advice here

Note: Self-employed workers are not currently entitled to Statutory Sick Pay or Coronavirus Job Retention Scheme. This remains an evolving issue and further announcements are expected in the next few days. I will update when this is clearer.