Financial assistance for self-employed workers

posted by 2 months ago in Covid-19
Support for self-employed

Boris Johnson has placed the UK on a police-enforced lockdown, as part of drastic new measures to bring the coronavirus outbreak under control. This means people can only leave their homes for very limited reasons, with police given the power to enforce this. The news followed an announcement that the death toll had risen in the UK to 578, a rise of more than 100 in 24 hours.

Work from home wherever possible

The government has advised that anyone who is unable to work from home should continue to go to work, while following social distancing guidelines. However, the CBI business organisation has reported thousands of emails from business owners and employees concerned about creating a safe working environment.

There are some businesses which are permitted to open such as food shops, post offices, bicycle shops and banks. Although most businesses are committed to ensuring safe working practices, in many cases people are unable to practice social distancing as their roles do not allow for 2-metre distances. There have also been reports of many businesses struggling to obtain the required PPE, such as gloves and hand sanitiser.

If an employee shows any coronavirus symptoms or lives with a person who has symptoms, they should be advised to stay at home. In addition, any vulnerable employees which are considered vulnerable, will fall under the governments shielding guidelines and should stay at home. Any businesses which are unfamiliar with the required guidelines are advised to refer to the guidelines produced by Public Health England.

Financial assistance for self-employed workers

It was announced last week that employees would receive 80% of their wages, through a government wage subsidy. Initially, self-employed and freelance workers were not covered by this scheme, leaving many worried about their financial security. However, the Chancellor Rishi Sunak has announced eagerly anticipated measures to support self-employed workers who have suffered a loss in income due to the coronavirus outbreak.

Self-employed workers and partnerships will be eligible to receive 80% of their profits, with a cap at £2,500 per month. This will initially be payable as a lump-sum at the beginning of June, to cover the previous three months. The subsidy is known as the Coronavirus Self-employment Income Support Scheme.

To be eligible you must have been trading in the last financial year and still be trading and planning to trade now and for the duration of this financial year. At least 50% of your income needs to be derived from self-employment and your trading profit needs to be less than £50,000.

HMRC will use existing information from tax returns to invite eligible people to apply and confirm they are eligible. The subsidy will be paid straight into individuals banks, with details provided during the application process.

Who is not eligible for the Coronavirus Self-employment Income Support Scheme?

Unfortunately, if you are self-employed but have not submitted a full year of accounts, you will not be eligible for assistance through the scheme. In addition, those who are employed through their own company and pay themselves a salary or director’s dividends will not be covered by the scheme. Although, they could be eligible to receive 80% of their salary through the Coronavirus Job Retention Scheme, if they process their salary though PAYE.

Whether you are self-employed and have slipped through the net for help or are operating a business and need to increase cash flow, here at BusinessComparison we can help. We specialise in helping businesses of every type access the most competitive deals for many financial products, including loans and bank accounts. As a broker we can match you to a lender most suited to your situation, so you have the financial support you need during this difficult period. To find out more, please contact our team today.