COVID-19 - Self Employed Support Schemes
In the midst of the coronavirus outbreak, the UK has effectively gone into lock-down, urging everyone to stay at home and for all businesses to close, except for those providing essential goods or care. The government have now introduced measures to help the self-employed combat the inevitable loss of earnings that this period of uncertainty will cause.
If You Are Self Employed
The government have now issued several schemes in order to help self employed workers survive and to overcome inactivity during this pandemic.
Self employed Income Support Scheme
In order to bring benefits in line with those on PAYE, the government has introduced the Self-employment Income Support Scheme. This will support self-employed individuals who are suffering a loss of income due to COVID-19. The scheme will provide a grant to self-employed workers, worth 80% of their average monthly profits over the last three tax years, up to a cap of £2,500 per month. The government hopes that this will be available by June, and will contact anyone who is eligible. Chancellor Rishi Sunak believes this will impact 95% of self employed workers. To be eligible you must have filed a 2019 self assessment tax return (meaning the newly self employed are not eligible). If you have not filed a tax return the government have given an extra 4 weeks (from 26th March) to do so.
Deferral of Self Assessment Payment
To ease the cash flow worries of the self employed, the government have offered a deferral of the self assessment payment on account due in July. This payment can be deferred until 31st January 2021. If you are due to make a self- assessment payment on account on 31st July 2020 then you are eligible for the deferment.
The government have removed the minimum income floor, making universal credit available to anyone who is suffering a loss of earnings from the pandemic. Whilst UC has always been available to cover the self employed when earnings take a dip, the minimum income floor may have made it inaccessible to many. The amount you can claim depends on your circumstaces:
Single & Under 25 £251.77 per month
Single and 25 or over £317.82 per month
In a couple and both under 25 £395.20 per month
In a couple and either of you are over 25 £498.89 per month
This situation is fluid and amounts may change. To double check, see here
These amounts will be tapered based on your savings. Anyone with over £16000 in savings is not eligible to apply for universal credit. To apply visit the government website.
Business Interruption Loan
The business interruption scheme has also been made available to the self employed, to help those that are not eligible for the other schemes. This will allow you to access loans of up to £5M, for up to 6 years and interest free for the first 12 months. You should apply through your lender or via one of the 40 accredited finance providers offering the scheme.
For more details and to view all available schemes visit www.businesssupport.gov.uk