Over the past couple of weeks, the government have introduced a raft of new measures to help financially support people through the COVID-19 crisis.
These have included offers to pay the wages of those who are no longer able to work, changes to make the benefit system more generous and various different options for businesses that may be struggling with rent and labour costs. Finally, we also now have an idea of the support that will be made available for self-employed people who have suddenly found themselves without a source of income.
The government’s plans
It took a little longer for the government to announce their plans for the self-employed, mainly due to the relative complexities surrounding self-employed income. They have now announced the self-employed income support scheme, which will allow people to claim a grant of 80% of their profits, up to £2,500 per month. Here’s a summary of the key points:
- This will only apply for people who get the bulk of their income – that’s more than half – from being self-employed.
- It’s only available for people who made a profit of under £50,000 in the ’18/’19 tax year, or an average trading profit of under £50,000 across the previous three years.
- You don’t need to apply: HMRC are going through their records to determine who is eligible and get in touch with those who may need support.
- The amount that you get will be based on an average of your profits over the past three years.
- In order to qualify, you need to have submitted your tax return last year, be trading this year, and intend to continue trading next year.
- The money is taxable and is unlikely to be paid out until June.
There is more information available from the government website.
This seems like a positive step forward, which offers quite a generous package to those who were previously hanging in limbo. Inevitably, though, it won’t apply to everyone. For those who are struggling and not able to take advantage of any of the new government schemes, the best option may be to turn to the benefit system:
- Universal credit. Many self-employed people will be eligible for universal credit if they have lost their income (or if income has been significantly reduced). The standard monthly allowance is £409.89.
- Housing benefit. This is paid on top of the standard universal credit income, specifically to cover rent and mortgage payments. You can apply for this alongside universal credit, as it’s now considered part of the same benefit. Start your application here.
Finding work during the crisis
The final thing to say is that not all work options are off the table: you may be able to find a job to help you through the coming months, if you are willing to step outside of your comfort zone. While it’s clear that many industries have taken a huge hit, others are urgently hiring to cover new demand: supermarkets and those making home deliveries are among them.
Many companies are also hiring for helpline advisers – a job which can sometimes be done remotely – and there are a lot of vacancies supporting public services including the NHS.
While this might not be the kind of work that you have been doing while self-employed, it’s worth considering taking a temporary position if you’re able to, especially if it’s becoming difficult to make ends meet. Keeping yourself going financially now may prove vital for helping you get back into your old working routine once the crisis is over.