Process to claim beneficial measures taken by the government for self-employed on the Coronavirus pandemic
Self employed individual doesn’t have rights like the employed people. Employed people enjoy some legal protection and we call them Statutory payments which includes SSP, SMP etc. In this Coronavirus outbreak, SSP Statutory Sick Pay has become a part of our daily conversation.
The estimated self-employed individuals is 4.8 millions among which 15 percent works as a labour force in the country. The government has taken necessary steps to help the self employed individuals in this coronavirus outbreak which is considered as pandemic.
As a self-employed, you don’t have an employer so you are not on the employer’s payroll. It makes the situation very difficult and obvious that you don’t have any other option but to look for the options directly available from the government.
Self-employed people are not eligible or don’t have access to the statutory sick pay. But in the recent pandemic crisis, the government has come up with a solution to help the self-employed people. If you are self-employed and you have been advised to isolate including the lockdown in the country, you should be able to claim Employment Support Allowance (ESA) from 1st day instead of 8th day.
ESA is £73.10 or
£57.90 for under 25 of age
But the government is raising the universal credit to £94.25 which means the self-employed people will receive as though they are in statutory sick pay.
Employment and Support Allowance NEW STYLE on the Government's website.
NSESAF1 claim form NEW STYLE to apply for Employment Support Allowance.
How can a Self-employed apply for Sick Pay from Government:
Minimum Income Floor affecting the self-employed:
It's for those who have been self-employed for 12 months. MIF asumes someone is working 35 hours a week and earns a national minimum wage. DWP uses this MIF with the real earnings to calculate the benefits. Which means if someone is earning below the MIF, DWP issues that he/she has earned at the MIF and calculates the benefit. But the new system will treat the self-employed people like the employed and will take care of the fluctuating income to make sure someone doesn’t lose financially.
There is an informative page called Coronavirus and claiming benefits from Universal credit. Please check them for more information.
Do We Need to Pay Tax for Self-employed in Coronavirus Crisis:
No, self-employed people don’t need to pay the tax, payment on account in July 2020.
To help the self-employed in this crisis, the government has decided to support them. The people who have the payment on account due in July 2020 can pay them in January 2021.
Coronavirus Grant of 80% for Self-Employed- ADDITIONAL SUPPORTS announced on 26 March 2020:
Self-employed hasn’t been forgotten; announced by the chancellor in a recent conference held at Downing Street. It is one of the most generous packages in the world.
Who is Eligible for the Self-employed Grant of 80%:
Those who are self-employed and their trading profits up to £50,000 per year can claim 80% of their average monthly profits based on their last three years figure up to £2,500 a month and also continue with the business.
This self-employed grant will be available only for those whose main income is from self-employed.
Another important condition to be qualified for this grant is the applicant must have submitted a tax return for 2019.
Anyone who missed the deadline 31st January 2020 are given four more weeks from 26 March 2020 (announcement day) to submit the tax return with a view to be qualified for the scheme.
How to Apply for the 80% Self-employed Grant:
Treasury officials estimated the 3.8 million people will be qualified for this scheme. HMRC will contact them directly and can check their previous tax returns for eligibility. Once eligible for the self-employed grant, they will be asked to apply online. Then,the benefits will be banked in their prospective bank accounts.
The grant would be paid at the beginning of June to recover three months back. It will be extended if necessary. The Treasury department is being called to make it ready on time and provide the grant as soon as possible.
Other Grants and Supports from the Government for Self-employed:
Those who have been self-employed recently, after 06 April 2019, are not eligible for this scheme, instead they are advised to look for other welfare payments through Universal Credit which are explained at the beginning of this post. People are allowed to access the business interruption loans and a three months mortgage holiday. Self assessment income tax, payment on account, is delayed to the 31st january 2021 from July 2020.
Please read the guide of the chancellor gives support to millions of self employed individuals on government website for a clear understanding. If you need help, you can speak to small business accountants in London. Taj Accountants in London is always happy to support our self-employed clients.