Modern Woman are keeping in touch with live updates from trusted sources and following Government guidelines surrounding current circumstances.

What Help Is Out There For The Self-Employed?

 

We have put together a quick few ‘need-to-knows’ surrounding the current situations of being self-employed and the financial affairs during this unprecedented time in the UK. Please note we are updating this page as and when we hear of further financial news.

 

Income Support Scheme

The government will pay self-employed people who have been adversely affected by the coronavirus a taxable grant worth 80% of their average monthly profits over the last three years, up to £2,500 a month. 95% of people who are majority self-employed will benefit from this scheme. HMRC are working on this urgently and expect people to be able to access this scheme no later than from the beginning of June. To make sure that the scheme provides targeted support for those most in need it will open to anyone with trading profits of up to £50,000.

Employee or zero hrs contract / agency worker who’s not working?

You’re due 80% of salary up to £2,500/mth. Two weeks ago, the Govt announced the Coronavirus Job Retention Scheme, which means employers can choose to put any staff who were on their payroll on 28 Feb on ‘furlough’ (standby), and the Govt will cover 80% of their salary up to £2,500/mth – firms can top it up to 100% but don’t need to.

Income tax

Payments due in July can be deferred to the end of Jan 2021.

Universal Credit

If you have COVID-19 or are advised to self-isolate, you can now more easily make a claim for Universal Credit (UC) or new style Employment and Support Allowance. It is being advised for the self -employed to seek financial help through claiming Universal Credit. Universal Credit consists of a monthly payment to help towards living costs. You will need to meet fairly specific criteria’s; namely you are going be on a low income and struggling with keeping up with bills etc or are out of work completely. As you would expect, you must provide evidence about your business and what you are earning/had been earning through your business up until now. If you are eligible for new style Employment and Support Allowance, it will now be payable from day 1 of sickness, rather than day 8, if you have COVID-19 or are advised to self-isolate.

 Time To Pay Arrangement

A ‘Time To Pay Arrangement’ is bespoke payment plan for your outstanding tax liabilities agreed with HMRC. If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline 0800 0159 559 that has been set up to for businesses & self-employed in financial distress and with outstanding tax liabilities. 

Mortgage Repayment

You can currently ask for up to three-months repayment deferment on your mortgage to give you some breathing space during this unsettling financial time.This deferment applies to homeowners and buy-to-let landlords, to allow them to pass on the payment reduction or deferment to their tenants. You must agree your repayment with your bank if you want to organise a deferment on your mortgage. It will not affect your credit score.

How much ‘sick pay’ will I get as a self-employed person?

What about VAT?

Most self-employed earn below the threshold for registering for VAT, which stands at £85,000. The chancellor said he will be deferring VAT for the next quarter, saving businesses £30bn.

Minimum income floor. What does that mean?

Because the minimum income floor has been removed temporarily, self-employed people are now treated the same as employed people within the universal credit system. Previously, if someone had been self-employed for 12 months, universal credit would apply the minimum income floor to them, which is essentially a financial assumption about the income they have coming in, regardless of whether they are actually earning it. Benefit advisers say it was a harsh rule.

Utilise Your Skills

Use this time more than ever to generate new business. Network with new people and make your skills apparent. There may be some opportunities that arise for you to generate some new work. Now, is also the time to be creative with your skill set. For example, if you run a hospitality business and can’t work from home, how about offering skype one-to-one cooking classes?

 

Covid Credit Info: https://covidcredit.uk 

For more information on how to claim universal credit visit:  https://www.gov.uk/universal-credit and https://www.gov.uk/guidance/new-style-employment-and-support-allowance.

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