Coronavirus: resources for the self-employed

What help is out there for the self-employed?

Self-Employment Income Support Scheme - self-employed individuals (including members of partnerships), who have lost income due to the Coronavirus pandemic, may qualify to claim a taxable grant from HMRC worth 80% of the relevant trading profits figure, up to a maximum of £2,500 per month for the next three months. HMRC will invite eligible self-employed individuals to apply based on those who have filed a 2018/19 filed tax return and who meet certain criteria. To find out if you qualify, please see our detailed factsheet.

Universal Credit

If you are self-employed and receiving Universal Credit and you have COVID-19 or are advised to self-isolate, the requirements of the Minimum Income Floor will be temporarily relaxed. This change took effect on 13 March and will last for the duration of the outbreak to ensure that self-employed UC claimants receive support.

If you need to claim Universal Credit but have COVID-19 or are self-isolating, you will now be able to claim and access advance payments upfront without attending Jobcentre Plus. Please visit https://www.gov.uk/universal-credit for more information, or see our detailed factsheet here.

Deferring Tax Payments

All Income Tax payments due on 31 July 2020 will be deferred automatically for all Self-Assessment Tax Payers and added to the payment due on the 31 January 2021, as explained here. No applications are needed and no penalties or interest will be added if you defer your payment on account.

Time to Pay

If you need further help with deferring and/or reducing your tax payments, you should consider the new “Time to Pay” option here.

OUR OBSERVATIONS

One of the challenges to creating a fair system of support for all self-employed workers is that they are a disparate group. Analysis by the Institute for Fiscal Studies showed that about a third have a taxable income of less than £10,000, whilst a small number of high-earning partners in professional firms rank amongst the UK’s top 1 per cent of earners.

Many poorer self-employed people will be helped by the government’s decision to scrap the “minimum income floor”, which often makes those on low incomes ineligible for help under Universal Credit.

However, self-employed people who have savings, or live with a higher-earning family member, would still not qualify for help under Universal Credit. Furthermore, those higher up the earnings scale could face very steep losses of income. There also remains a gap in the cover of Statutory Sick Pay for 2m self-employed people with low earnings.

Some commentators think it could be easier to relax the rules on means-testing under Universal Credit, or to make contributory benefits that might be open to some self-employment people, more generous.

Community and charitable organisations

Community and charity organisations have also been highlighted as needing additional support. As yet, we await further announcements, but in the meantime if your organisation is charitable or community based, we are aware of one grant body, Quartet Community Foundation (https://quartetcf.org.uk/ ) that may be worth investigating. We have no relationship or allegiances with Quartet but, having heard about them recently, we thought we would at least share their details in case they might be able to help.

(Source: Radio Bristol 23 March 2020)

The Chancellor also suggested that Charities might be eligible for some form of business rates discount and that other support was being considered.

Further resources

At the time of writing (23 March 2020), we are aware of the following possible communities and resources, which may be a valuable source of help:

The Enterprise Nation hub https://www.enterprisenation.com/ is apparently a very good forum for the self-employed and micro businesses.

The charity Turn2You here https://www.turn2us.org.uk/ also appears to come highly recommended.

(Source: BBC Radio 5 Live 18 March 2020)

Please note that this is only a summary of the main issues and should not be construed as advice. Every effort has been made to ensure factual accuracy at the time of publication (3 April 2020), however, the government response to the Coronavirus situation is changing 24-7, so it should not be relied upon completely.

For further information or advice on any of the issues raised, or for help with services like bookkeeping, cash flow management or payroll during the Coronavirus pandemic, please call us on 01225 325580, email info@richardsonswift.co.uk, or contact your usual client director.