Help for self-employed people during the Coronavirus crisis

If you’re self-employed, you may be wondering what to do with your business during the COVID-19 lockdown. What kind of help is available? Let’s find out more.

Many self-employed people are finding themselves at a crossroads during the Coronavirus crisis. It’s possible that they will have seen demand for their services decimated while their customers are required to stay at home. If they sell to other businesses, they may be a victim of their customers’ financial troubles.

Soon after the lockdown was announced, the Government set out their Coronavirus Job Retention Scheme, known as furloughing, to alleviate the pressure on employers worried about keeping their businesses running, as well as employees concerned about redundancy. However, there was no provision in the scheme for self-employed people.

A few days later, the Chancellor outlined details of the Government package to help self-employed people through the crisis.

In this article, we’ll look at the basic provisions for self-employed people as things currently stand. We’ll look at what is on offer, so you can decide whether it is right for you.

Government provisions for the self-employed

The centrepiece of the Government’s announcement was an income support scheme for self-employed people. It will pay self-employed people a taxable grant of 80% of their average monthly income, up to a value of £2,500 per month. In this way, it is similar to the furlough scheme; the difference is, self-employed people do not have to stop working. Self-employed people can claim their grant and still do business.

Who can claim the grant?

The scheme is available to any self-employed person with trading profits of up to £50,000. People earning more than this amount will not qualify, but it will cover an estimated 95% of self-employed people in the UK.

To qualify, you must have submitted a tax return for the 2019 tax year. This is to minimise fraudulent attempts to claim. However, if you missed the 31st January 2020 deadline to file your tax return, you can still submit your return, the deadline having been extended to April 23rd.

You must also make the majority of your income from your self-employed profession. Employed people who earn self-employed income ‘on the side’ are not eligible for the grant.

How much can you claim?

The taxable self-employed grant aims to cover 80% of your average monthly income, capped at £2,500.

The exact amount will be calculated by taking an average of your income over the last three years.

When can you claim?

HMRC aims to contact all the self-employed people who qualify for the scheme by mid-May, asking them to complete an online form. If accepted, the money will be paid directly into their bank accounts.

However, the scheme is unlikely to be ready to go before the end of June. The exact date that money will start coming through is not currently known. This may cause difficulties for self-employed people who have seen a drop in revenue and are experiencing cash flow issues. The current Government advice to self-employed people in this position is to register for Universal Credit.

Find out more

There is a lot of information to take in at the moment, and every business is different.

If you have any questions about Employment Law during the COVID-19 crisis, it’s time to talk to Couchman Hanson.

We are currently offering you a free, 30-minute call with a Couchman Hanson employment lawyer, where you can get all your questions answered. It’s peace of mind during these uncertain times.  

To find out more, call 01428 722189 or email enquiries@couchmanhanson.co.uk