Are self-employed individuals entitled to sick pay?
Generally, employees are entitled to sick pay while self-employed individuals are not. This is because sick pay is paid by an employer. However, the Government has announced assistance for self-employed individuals affected by Covid-19, through the Self-Employment Income Support Scheme.
This scheme allows self-employed individuals to claim 80% of their profits (up to £2,500 per month) for the next three months. You can apply for this scheme if you are self-employed or a member of a partnership and you:
have submitted your Income Tax Self Assessment for the tax year 2018 - 2019
traded in the tax year 2019 - 2020
are trading when you apply (or would be, if not for COVID-19)
intend to continue trading in the tax year 2020- 2021
have lost trading/partnership trading profit due to COVID-19
In addition, more than half of your income must be through self-employment and your profits from this self-employment must be less than £50,000 per year.
The amount of relief you will be entitled to, will be 80% of the average profits from the previous three tax years (where applicable). This amount will then be capped at £2,500 per month and will be paid directly into your bank account in one lump sum.
Where you have not yet returned your Self Assessment tax return for the tax year 2018 - 2019, you have until April 23 2020 to do so.
You cannot currently apply for this scheme, which is expected to open in June 2020. If you are eligible for the scheme, HMRC will contact you once applications open. For more information read the Government’s guidance, Claim a grant through the coronavirus (COVID-19) Self-employment Income Support Scheme.
What if I’m self employed and require urgent financial assistance?
The Government has made it easier for individuals affected by Covid-19 to access benefits. Those individuals on Employment and Support Allowance (ESA) who are suffering from Covid-19 or are required to self-isolate, will be able to claim the allowance from day one, instead of having to wait for seven days.
Further, the minimum income floor has been temporarily removed from Universal Credit for self-employed individuals who have to self-isolate as a result of coronavirus. The minimum income floor is an assumed level of income, which takes into account how much an individual would normally be expected to earn in a month, when calculating their entitlement to Universal Credit. Not having this minimum income floor in place, means that self-employed individuals will be able to claim for time they spend off work due to sickness.
Self-employed individuals in need of financial assistance will be able to apply for Universal Credit over the phone, without the need of attending a jobcentre.
Self-employed individuals who do not have enough money to live on while they wait for their first Universal Credit payment, can ask for an advance payment. This can be done online or through their Jobcentre Plus work coach. To apply, individuals will need to:
explain why they need an advance
verify their identity (either when they apply online or during their first phone appointment with their work coach)
provide bank account details for the advance
For more guidance visit the Government website.
I’m struggling to meet my Self-Assessment payments on account. Is help available?
If you’re due to pay a self-assessment payment on account by 31 July 2020 but won't be able to make the payment by that date due to Covid-19, then you may defer payment until January 2021. To defer these payments, you don't need to make an application.
During the deferral period, you can set up a budget payment plan to help you pay the deferred payment on account when it comes due. You can set up a payment plan by either setting one up online (via the GOV.UK website) or calling the Payment Support Service:
Payment Support Service
Telephone: 0300 200 3835
Monday to Friday, 8am to 4pm