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Self-employment and coronavirus

Many self-employed people have been affected by the coronavirus pandemic. We look at what help is available.

Many self-employed people have been affected by the coronavirus pandemic. We look at what help is available.

Emily Kindness
From the Business team
7
minute read
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Posted 07 APRIL 2020

What are my rights if I’m self-employed?

Whether you can continue business as usual will depend on what you do. The Government has set out a list of which types of businesses must shut and those that can remain open. For example, restaurants must shut, but they can instead offer takeaway and delivery. Garages, hardware shops, vets and vehicle rental services are among the essential businesses that can stay open, while hairdressers, gyms and market stalls selling things other than essentials, such as food and drink, must close.

See the full list from the government.

What if my work is carried out in other people’s homes?

If your work is carried out in people’s homes, for example doing essential repairs and maintenance, you can continue, provided you are well and have no COVID-19 symptoms.
 
You’ll need to make sure you follow public health guidelines, including maintaining a two-metre distance from anyone in the property, to make sure everyone remains safe.

You mustn’t work in any household that is isolating, or where a person is being shielded, unless you’re asked to put right something that’s a direct risk to the safety of the household, such as emergency plumbing or repairs. If you have to do this, you can get help from Public Health England about how to work safely.

What should I do if I’ve lost income because of coronavirus?

If you're self-employed, or a member of a partnership and have lost income due to coronavirus, you can apply to the Government’s Self-employment Income Support Scheme.
 
You can also apply for Universal Credit if you’re currently facing financial difficulties.
 
You may also be eligible for some of the other government schemes aimed at small businesses. 

What is the Government doing to help the self-employed?

The Government is offering help to the self-employed in a variety of ways, depending on what you’re eligible for and what your circumstances are.
 
The coronavirus Self-employment Income Support Scheme is the main scheme to help the self-employed. It will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month, for three months from March, and the Government has promised that the scheme may be extended if needed.
 
You might also be eligible for rate relief, business interruption loans, deferral of tax payments, grants and Universal Credit.

Who is eligible for the Self-employment Income Support scheme?

To get the grant, your self-employed trading profits must also be less than £50,000, while more than half of your income must come from self-employment. You will also need to have lost money because of COVID-19.

If you’re self-employed, or a member of a partnership, you’ll be eligible if you:

  • have submitted your Income Tax Self-Assessment tax return for the tax year 2018-19
  • traded in the tax year 2019-20
  • are trading when you apply, or would be except for COVID-19
  • intend to continue to trade in the tax year 2020-21

If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020 to be eligible for the scheme.
You’ll get a maximum of £2,500 a month for three months and this will be paid directly into your bank account. You don’t have to apply yet; HM Revenue & Customs (HMRC) will contact you if you’re eligible and ask you to apply online.

But importantly, unlike the scheme to help employees, self-employed people can carry on working if they have work available.

See full details of the coronavirus Self-employment Income Support Scheme.

You’ll only be able to access the scheme through the government website GOV.UK. If you get emails or messages claiming to be from HRMC and asking you to click on a link or to give information such as your name, credit card or bank details, it is a scam.

See how to avoid coronavirus scams

Can the self-employed apply for other help for small businesses?

Yes, you may be able to benefit from several schemes designed to help small businesses, such as:

  • deferral of self-assessment income tax payments due in July 2020 and VAT payments due from 20 March 2020 until 30 June 2020
  • grants for businesses that pay little or no business rates
  • the Business Interruption Loan Scheme
  • increased amounts of Universal Credit If you’re a director of your own company and paid through PAYE, you may be able to get support using the Job Retention Scheme, by putting yourself on furlough. Technically, if you’re furloughed, you can't then work for the firm, but you can continue to perform statutory obligations as a director. For example, official legal filings.

I am eligible for help but can’t wait until June. What can I do?

It’s worth looking at any business insurance policies to see if you have any business interruption cover or loss of earnings cover that could help.
 
You can apply to the Business Interruption Loan Scheme which supports SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to six years.
 
The scheme is now open for applications, and all major banks are offering it, so please speak to your bank.
 
The full rules of the scheme and the list of accredited lenders are available on the British Business Bank website.
 
If you’ve put aside money to pay your tax bill in July, you could consider using that until the grant comes through in June, because you can defer your tax payment until January 2021.
 
You can also apply for Universal Credit, if you’re eligible.

What if I’m not eligible for the Self-employed Income Support scheme?

If you’ve only been self-employed for a short time, you’re not likely to be eligible for the scheme. In this case, you could consider applying for a business interruption loan, seeing if you can claim on any of your insurance policies, and making the most of the other options available like:

  • deferral of self-assessment income tax payments due in July 2020 and VAT payments due from 20 March 2020 until 30 June 2020
  • grants for businesses that pay little or no business rates
  • the Business Interruption Loan Scheme
  • increased amounts of Universal Credit.

What if I end my self-employment?

Many self-employed people who can’t work are finding ways to tide themselves over, for example by working in one of the sectors that is currently over-stretched. Many of the large supermarkets have been taking on additional workers, for example.
To be able to claim through the Self-employment Income Support Scheme you have to:

  • be trading when you apply, or would be except for COVID-19
  • intend to continue to trade in the tax year 2020-21
  • have trading profits under £50,000 and for these profits to make up more than half of your total taxable income

If your job means that you no longer fulfil these criteria, then you will no longer be eligible for the income support scheme.

What if I can’t work because I am sick or self-isolating?

In this case, you may be able to claim Universal Credit.

If you have income protection insurance and you are ill for long enough, you may be able to make a claim on your policy.

See more on coronavirus and income protection

What protection do I have if I work in the gig economy?

If you’re one of the many people who are on a zero hours contract, are freelance or work through an agency, it's vital to check to know for sure if you’re actually employed or self-employed.

The best way to tell this is to see how you're taxed. If you're taxed through PAYE, then you're considered an employee. So, you should have the same rights as an employee. This means that if you can no longer work you could be entitled to furlough through the Coronavirus Job Retention Scheme, which means the Government will pay 80% of your salary up to £2,500 a month.

Coronavirus scams

As a self-employed person you need to be particularly careful at the moment, as there are lots of criminals trying their luck with scams relating to coronavirus. Ignore emails and calls that promise anything too good to be true and go directly to government sites to apply for benefits, grants and loans.

See how to avoid coronavirus scams

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