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24/03/2020

Coronavirus: Self-employment support

24/03/2020

Coronavirus: Self-employment support

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Prime Minister Boris Johnson has pledged to ‘stand behind’ Britain’s five million self-employed workers as COVID-19 continues to sweep the nation.

The statement follows Chancellor Rishi Sunak’s promise on Friday (March 20) to “strengthen the safety net for those who work for themselves” as he offered a package of support measures to self-employed workers and freelancers.

The Chancellor is also currently working to unveil further support in the coming days.

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What help is available for self-employed workers?

Mr Sunak announced Brits working for themselves will be able to access the equivalent of statutory sick pay (SSP) and will be given tax deferrals.

However, at the moment, they will not be part of the 80% earnings pledge which will see employees earning up to £2,500 per month have almost all of their wages covered by the government during the outbreak.

According to figures from national poverty charity Turn2Us, if self-employed households are forced to stop working due to the virus, 82% would be better off if their income was guaranteed in the same way as employees.

As the nation calls for more support for the self-employed, The Federation of Small Businesses (FSB) is now urging the government to set out and implement new support as rapidly as possible for self-employed Brits, such as hairdressers and taxi drivers, left feeling the pinch.

FSB National Chairman Mike Cherry said: “Over the weekend we have heard from thousands of self-employed people – including hairdressers, bakers, childcare providers, taxi drivers, and café owners – many frightened and in despair at seeing their business fall away, and staring at the prospect of little or no financial support.

“While it is welcome that the government has pledged to cover 80 per cent of the wages of impacted employees, five million self-employed strivers have until now only been offered, at best, access to £94 a week. In desperation, many have attempted to apply for Universal Credit after Friday and have been turned down.

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“Time is now running out”

As shutters come down on pubs, theatres, cinemas, and non-essential retail stores across the country, the calls for self-employed support grow louder than ever.

Mr Cherry continued: “These are people who have worked hard to build up their businesses, paid their taxes and helped the economy to grow. They now face a crunch point, with many unable to operate – leaving them without money, but with bills still stacking up.”

“We have been strongly urging the government not to allow the self-employed to be left high and dry, and it is welcome to hear that the Prime Minister is listening and offering new hope. This must now be turned urgently into practical and easily accessible support. Time is now running out.

“While the government has a big role to play, it is also vital that the banks play their part as well. Billions of pounds of loan guarantees come into effect from Monday (March 23), and the banks must pass on without delay this access to finance for the struggling self-employed.”

 What rights to self-employed and freelance workers currently have?

One of the most important things to note is that self-employed and freelance workers now have the right to access universal credit at a rate equivalent to SSP for employees.

Mr Sunak announced that the minimum income floor of universal credit has been temporarily removed, allowing the self-employed to be treated the same as those in employment.

This means that the self-employed will be entitled to £94.25 per week of SSP for up to 28 weeks. New rules mean this will now be payable from day one instead of day four for applicants.

Further government advice and guidance about universal credit can be found here.

Anyone directly affected by coronavirus or self-isolating can also apply for contribution-based employment and support allowance (ESA) according to government advice.

To be eligible you must have paid enough national insurance contributions for the last two to three years and will receive up to £73 per week. This payment is not affected by your savings or the income or savings of your partner, however, if you receive a private pension of more than £85 this will be reduced.

In a bid to offer support during the coronavirus outbreak the government is allowing those eligible to claim ESA from the first day of sickness or self-isolation rather than the typical eighth day.

Payments are made every two weeks, in arrears, so if you apply you should expect your first payment after a fortnight.

To apply or for further details, visit the government website here.

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Self-assessment tax and VAT payments delayed

The Chancellor also announced we will defer the next round of self-assessment payments, originally scheduled for July 31, to January 2021 to offer breathing space to those in need.

It was also announced that VAT will be deferred for the next quarter, saving businesses £30bn.

 

As calls for further support for self-employed workers during the coronavirus outbreak increase and the government seeks to offer further guidance, we will continue to update this story as it develops.

However, if you’re struggling with debt and are seeking advice about how to manage your repayments during the outbreak, speak to an expert advisor on 0808 253 3301.

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