Self-employed coronavirus help: latest round-up
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For many of the self-employed, coronavirus help packages could be the lifeline that saves their business during the pandemic.
Currently, the main source of help for the self-employed is the Self-Employment Income Support Scheme. If you qualify, you can claim a taxable grant worth 80% of your average monthly profit, up to a maximum of £2,500. Official guidance on the scheme is published here.
The scheme has its flaws. For example, if you only recently became self-employed – i.e. didn’t submit a tax return for 2018/19 – you don’t qualify. This is to stop people fraudulently claiming they recently became self-employed. Similarly, self-employed people who use a limited company to pay most of their income via dividends don’t qualify either. However, if they pay themselves any amount of salary via a PAYE scheme, they could look at the Coronavirus Job Retention Scheme. If they decide to furlough themselves, they could claim up to 80% of monthly income, also up to a maximum of £2,500.
In addition to these schemes, there’s also the possibility that the self-employed can claim Universal Credit. Indeed, record numbers of people are doing just that.
Self-employed coronavirus help – checklist
Unsurprisingly, many of our clients have asked us for regular clarifications and updates. At the moment, the below are some of the more important things of which you need to be aware.
- If you want to claim via the Self-Employment Income Support Scheme, you MUST submit your 2018/19 tax return by 23 April. If you are currently late with your most recent Self-Assessment tax return, please submit it ASAP. If you don’t submit it by Thursday 23rd April, then you will not be able to claim anything via this scheme.
- If you plan to claim Universal Credit (UC), savings put aside for tax won’t count against you. Normally, if you claim UC, the amount you receive drops if you have savings of over £6,000. If you have £16,000 or more, you can’t claim. The Department for Work & Pensions has now clarified that savings for tax won’t be counted. However, you may need to prove the money is put aside for tax. This will be simpler if you keep it in a dedicated business bank account, but if you do keep it in a personal account be prepared to provide evidence that you’ve kept the money aside for HMRC.
- You CAN apply for Universal Credit, even if you receive payments from the Self-Employment Income Support Scheme. If you qualify for Universal Credit at the moment, you should apply as normal. If you subsequently receive income from the other scheme, then your UC payments will be reduced. Moneysavingexpert.com says it has been assured there won’t be any ‘retrospective clawbacks’ due to this.
We know that this is a tough time for many self-employed and freelance workers. But remember, we are here to help – if you need any advice on the financial assistance that’s available, please get in touch.
About Ben Locker
Ben Locker is a copywriter who specialises in business-to-business marketing, writing about everything from software and accountancy to construction and power tools. He co-founded the Professional Copywriters’ Network, the UK’s association for commercial writers, and is named in Direct Marketing Association research as ‘one of the copywriters who copywriters rate’.