COVID-19: Support for the Self Employed
When the Government initially announced its support package for businesses, there was at least one significant omission, namely the self-employed. That has now been rectified with a grant covering 80% of trading profits capped at £2,500 per month.
As a self-employed person, you can continue trading. However, the grant will cover losses sustained because of Coronavirus. However, there is confusion over the timing and the details.
To be eligible, applicants must have filed a tax return for the 2018/19 tax tear, have traded in 2019/20 and be currently trading at the point of application (unless they have had to stop because of Covid 19) with an intent to continue trading in 2021.
The total will be taken by calculating an average of trading profits across the three years between 2016/17, 2017/18 and 2018/19. Those who haven’t yet filed a tax return, will be given an additional four weeks to do so from 31st March.
The support is limited to those with trading profits of less than £50,000 averaged out over the past three years. This, the Government says, only excludes the top 5% of freelancers, but it makes the somewhat bold assumption that nobody over that limit will experience financial hardship.
Payments won’t be made until June at which point eligible claimants should receive a lump sum payment covering the past three months. That could be a significant financial boost at the time but has a considerable gap for people who are struggling financially in the immediate term.
In the meantime, there is some support available.
- Rental support: The Government has extended the notice period required for landlords to issue evictions to three months. This will apply both to your residential and business premises. Landlords up and down the country have been working with tenants to develop payment plans, so if you are struggling, it’s a good idea to keep an open dialogue with them.
- Sick pay: There have also been changes to employment support bringing it up to the level of statutory sick pay.
- Benefits: Universal credit has been increased by £1,000 per year, which could equate to £20 per week. Many have been quick to ridicule this figure, but this is just the standard increase. Depending on your circumstances, you may be able to claim additional payments such as the housing allowance. According to Martin Lewis of Money Saving Expert, some claimants could be eligible for £1,500 per month.
The big danger is that self employed people dismiss ideas such as Universal Credit thanks to its reputation and focus only on the grant. While that may be taking some time before it is ready, it is worth assessing your situation and working out what support you are entitled to in the meantime. These are uncharted waters for all parties.
Understanding the support on offer can be difficult, advice is complicated and the situation is changing all the time. It pays, therefore, to get expert advice from an accountant. He or she will be able to look at your situation and tell you what you’re entitled to.