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Coronavirus - help for self-employed people

For self-employed people struggling with money because of coronavirus

The coronavirus outbreak and the need to stay at home to avoid spreading illness has meant that lots of businesses have closed and people are struggling with money.

The government has set up support schemes to help people who are struggling because of the coronavirus outbreak. Learn how these schemes interact. There is also help available with bills and with Council Tax.

There is different support in place for people who are employees and people who are self-employed. 

If you aren’t sure if you’re an employee or self-employed, you can use the government’s online tool.

All the information on this page will help you work out how to get money coming in within a few days. However, if you need help sooner than that or you don’t have enough to eat and you can’t get food, you should use our Emergency Information guide.

Government scheme for self-employed people

The government has set up a scheme for self-employed people whose incomes are being hurt by the coronavirus outbreak. It is called the Self Employed Income Support Scheme. 

The scheme has now started making payments.

From 4 May 2020, HM Revenue and Customs (HMRC) started contacting people who are eligible for the scheme.

Be cautious about what information you give over the phone. Some scammers pretend to call from HMRC. Never give your password or banking pin code or log in details over the phone.

You can check if you are eligible for the Self Employed Income Support Scheme on the HMRC website.

Claiming benefits will not stop you from being able to get help from the Self Employed Income Support scheme. Claiming benefits will not affect the amount of money you get from the Self Employed Income Support Scheme.

There is other support you can claim as well as getting help through the Self Employed Income Support Scheme.

The scheme gives grants to self-employed people to cover 80% of their usual profits up to a maximum of £2,500 per month over March, April and May 2020. Grants do not have to be paid back. Grants will be taxable. On 29 May, the Chancellor announced that there will be another payout from the scheme in August. This payment will cover June, July and August. The payment in August will be 70% of usual profits, up to £2190 per month.

Not all self-employed people are covered by the scheme. 

People will only be covered by the scheme if they submitted a tax return for the April 2018-April 2019 financial year.

If you became self-employed after April 2019, you won’t get help from this scheme.

  • You might be able to get a government-backed loan to help your business get through this period. From 27 April, the government launched a new, simple application for small businesses.
  • If you live in Scotland, you might be able to get help from the Newly Self Employed Hardship Fund. This is a scheme to pay grants of up to £2000. The grants will be paid by councils. Contact your council for full details of the scheme. 
    • You must have been self-employed immediately before coronavirus
    • You must have become self-employed after April 2019
    • You must not be in receipt of certain means-tested benefits
    • You must be able to show you have lost income because of coronavirus. 
  • If you were due to pay tax on account in July 2020, you can push this back to January 2021.
  • If you were due to pay VAT for March, April or May, you can defer this payment.
  • Use our Benefits Calculator to work out if you are entitled to any benefits. Make sure you enter the amount of income you expect to get over the next month in order to work out your benefit entitlement.

How do all these schemes interact?

People who usually have profits over £50,000 per year are not covered by the scheme.

  • You might be able to get a government-backed loan to help your business get through this period. From 27 April, the government launched a new, simple application for small businesses.
  • If you were due to pay tax on account in July 2020, you can push this back to January 2021.
  • If you were due to pay VAT for March, April or May, you can defer this payment
  • Use our Benefits Calculator to work out if you are entitled to any benefits. Make sure you enter the amount of income you expect to get over the next month in order to work out your benefit entitlement.

How do all these schemes interact?

Directors of limited companies who pay themselves through a mixture of Pay As You Earn (PAYE) earnings and dividends are not covered by the scheme.

  • You can access the government’s job retention scheme for help with the money you usually pay yourself through PAYE. The government will cover up to 80% of what you usually pay yourself through PAYE.
  • You might be able to get a government-backed loan to help your business get through this period. From 27 April, the government launched a new, simple application for small businesses.
  • If you were due to pay tax on account in July 2020, you can push this back to January 2021
  • If you were due to pay VAT for March, April or May, you can defer this payment
  • Use our Benefits Calculator to work out if you are entitled to any benefits. Make sure you enter the amount of income you expect to get over the next month in order to work out your benefit entitlement
  • People who are directors of limited companies fall through a really big gap in the Self Employed Income Support scheme. You might like to get in touch with your MP to ask them to push for better support for people in your situation. 

How do all these schemes interact?

What other support can I get?

Self-employed people cannot get Statutory Sick Pay.

You might be able to get help through the benefits system. Use our Benefits Calculator to check what you can claim. Benefits are based on the income you have coming in at the moment, so make sure you enter your current income and not what you usually earn.

You might be able to access a government-backed loan. There won't be any fees or interest on the loan for the first 12 months. You can find out more about government-backed loans on the Gov.UK website. From 27 April, small businesses can apply for Bounce Back Loans. These are 100% government backed, and are quick and simple to apply for. You can only use this loan for your business and not for yourself.

The government has said that self-employed people who were due to pay tax on account in July 2020 can push that payment back to January 2021. You will still have to pay the amount that is due but this gives you longer to save up to pay it.

The government has said that Value Added Tax (VAT) payments due for March, April and May 2020 can be paid later.

You might be able to get a grant from a charity to help you out. Use our Grants Search to find charities that might be able to help people like you.

How do these different types of help interact? Can I apply for all of them?

You can apply for help through all of these schemes. If you live in Scotland and are applying for the Newly Self Employed Hardship Fund grant, you won't be able to get it if you are already receiving payments of Universal Credit.

Money you receive as a personal loan will be counted as capital when working out how much you can get in benefits. Use our Benefits Calculator to check how this would affect you. Money you receive as a loan to your business will be ignored when working out how much you can get in benefits.

Money you have set aside to pay tax or VAT will not be counted as capital when working out how much you can get in benefits. 

Money you receive through the Jobs Retention Scheme will be counted as income when you receive it and might affect your benefits claim.

Money from the Self Employed Income Support Scheme (SEISS) will affect your benefits when you receive it. If you're receiving Universal Credit, when you declare the SEISS grant as income to the DWP you can deduct business expenses you have had to pay in that assessment period. 

I am worried about Council Tax - what can I do?

If you are struggling with Council Tax, use our Benefits Calculator to see if you are entitled to Council Tax Reduction. If you are, contact your council to make a claim for it.

Your council may also offer a discretionary scheme to help with Council Tax. This might be able to help even if you are not entitled to Council Tax Reduction or if your Council Tax Reduction doesn’t cover all the Council Tax you have to pay. Contact your council to find out about this. 

Some councils are offering payment holidays on Council Tax. Check your council's website to see what their rules are.

I am worried about bills - what can I do?

Mortgage

If you have a mortgage and are struggling to meet your payments, you can ask your mortgage lender for a mortgage holiday. This won’t affect your credit rating. 

There are plans to extend the mortgage holiday scheme, but they have not been finalised yet.

Rent

If you are struggling with your rent, first check what help you can get through the benefits system. As well as this, you could speak to your landlord and ask if they would be willing to let you pay rent late. Evictions have been suspended for most tenants. However, if you are struggling with rent payments and your landlord is not being understanding, you should get advice.

Household bills

If you are struggling with household bills, speak to your utility providers and let them know why you’re struggling.

Lots of utility providers have schemes in place to help people who are struggling with money because of coronavirus.

Debts

If you have debts, get in touch with your creditors and ask them if you could suspend payment. Lots of lenders have special policies in place to help people who are affected by coronavirus.

From 14 April 2020, you can ask for a three month payment holiday on credit card debts and personal loans. This will not affect your credit rating.

From 14 April 2020, you can ask your bank for a £500 interest free overdraft facility on your current account. The overdraft will be interest free for three months. If you are already overdrawn by less than £500 you won't be charged any fees. 

From 24 April, you can ask for a three month payment holiday on car loans.

From 24 April, you can ask for a one month payment holiday on pay day loans.

From 24 April, if you have pawned any of your possessions you can ask for a three month extension on repayments before the items you have pawned are sold. 

From 24 April, if you have any items on rent-to-own, you can ask for a three month payment holiday.

Payment holidays are only a temporary fix and for a lot of people won't solve problems they have with debts. If you are worried about debt, you should get free help from a specialist debt adviser.

Everyone knows this is a stressful, difficult time for a lot of people. There is a lot of support out there but if you don’t ask for it you won’t get it. 

Updated: 29 May 2020

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