Covid-19 – Support Scheme Announced
Rishi Sunak has confirmed a financial package for self-employed workers who have been impacted by the virus outbreak.
The Self-Employed Income Support Scheme means that self-employed workers are able to receive up to 80% of their monthly wages, up to a maximum of £2,500 per month.
A self employed person or sole trader means someone who works for themselves in business. This is not to be confused with the director/owner of a limited company. Directors are technically employees of the company.
The payments will be calculated using the average monthly profits over the last three financial years. Where three years isn’t feasible, such as for younger business for instances, HMRC will instead average the period they do have up to three years.
- To qualify for the Self-Employed Income Support Scheme, applicants must have filed a return for 2019, and will be given four weeks to file this if it is still outstanding.
- The scheme is also only available for businesses whose yearly profits do not exceed £50,000
- The majority of your earnings must be from your self-employed work. Those who receive the majority of their earnings from regular employment will not be eligible.
- Those who pay themselves a salary and dividends through their own company are not covered by the scheme, but will be covered for the salary element of their income through the job retention scheme if they operate PAYE.
The Chancellor announced that the scheme is expected to be up and running by the beginning of June, though they hope to be able to make it available online more quickly.
This means that when the scheme does roll out, eligible self-employed workers will receive three months of backdated pay in June, in one go.
HMRC will directly contact those who are eligible, and include the relevant form to be completed.
There are also other existing schemes which have been updated to make them more accessible at this time.
Universal Credit for self-employed workers affected by coronavirus COVID-19
Universal Credit is a type of monthly benefit payment which can be used towards living costs.
If you do need support, begin your claim as soon as possible. The sooner it starts, the less financial pressure. Sensibly, the face-to-face appointment part of the application process has been replaced with a telephone interview for those who are self-isolating. This won’t affect your ability to claim an advance payment upfront.
How much can a self-employed person get through Universal Credit?
How much Universal Credit you can get depends on your circumstances. The short version is that there is a standard allowance which might be topped up further; for instance, if you have children.
There are lots of variables, so it’s worth using a benefits calculator or table from a reliable website such as EntitleTo.
It’s worth noting that age, savings, and whether you are single or applying as a couple also affects how much you can receive.
The good news is that the Chancellor has announced the current standard allowance will be increased. For one year, beginning 6th April 2020, claimants will receive an additional £20 per week.