Coronavirus help for the self-employed – Specific UK support schemes
Coronavirus is having a big impact on small businesses and the self-employment sector across the UK. Holvi is encouraging its users to avoid making panicked decisions. At the same time, we know just how concerned many self-employed people are.
We’ve been hearing your questions. Where can you go for reliable and up-to-date information? What specific financial support is available to sole traders? How do you keep your business profitable? And what are the benefits in case of illness?
At Holvi, we understand that lack of security is a concern for workers everywhere – and you might feel isolated from society. But you’re not alone. We’re here to help you stay up to date and motivated as this unprecedented and challenging situation unfolds.
In this article:
Please note that this is a live situation and this blog is written according to the current situation and guidelines.
Sole trader coronavirus support – where can you find information?
We’ve put together a coronavirus information hub, with content tailored to UK sole traders.
In our blog post on ‘Resources for sole traders in times of corona’, we give you the best sources of up-to-date information for sole traders and small business owners. Here are those links again:
The Money Advice Service: Coronavirus – What it means and what you’re entitled to
Gov.UK is continually updating its online resources as new information comes in. The Federation of Small Businesses (FSB) and the Association for Independent Professionals and Self-Employed (IPSE) are two powerful voices representing UK freelancers and small business owners to the Government. Along with Holvi, both organisations are closely monitoring the Covid-19 situation.
What does coronavirus mean for the economy, and for you?
Coronavirus is impacting the UK economy hard and taking the biggest toll on the country’s 5 million self-employed – which is 15% of the UK’s entire workforce. In just three weeks Covid-19 has already hit the global economy with an economic impact similar to both 2008’s financial crisis and the Great Depression. Restaurants, pubs, cafes and shops are being forced to close doors, and this presents new challenges. At the same time, it offers opportunity. Some self-employed workers have already found whole new lines of business and are quickly moving their services online.
Anyone who pursues self-employment knows the risks involved. There is no way anyone could have seen this coming, and yet
It’s you, the self-employed, who are best suited to finding creative solutions.
Meanwhile, there are strong organisations fighting in your corner and advocating reform to the Government. IPSE and FSB are pushing urgent policy change, and the Government has listened. In March 2020, the UK Government’s number one financial priority has been to find a support structure for the self-employed that is similar to what employees are getting through the Coronavirus Job Retention Scheme.
So, here’s what’s on the table.
Major financial support – what's available to self-employed people?
Self-Employment Income Support Scheme
The Self-Employment Income Support Scheme (SEISS) will support self-employed people who have lost income due to Covid-19.
The SEISS provides a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months.
This scheme is similar with the Government’s support to employees. It comes after urgent calls on UK Chancellor Rishi Sunak to provide fair support to the self-employed.
Holvi’s partner company TaxScouts has broken down SEISS in plain English here.
Small Business Grants Fund
The Government will also provide a Small Business Grants Fund (SBGF) for local authorities to support small businesses. This fund is only for small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief. It’ll take the form of a one-off grant of £10,000 to eligible businesses, helping them meet their ongoing business costs.
You’re eligible if:
Your business is based in England
You’re a small business and already receive SBRR and/or RRR
You’re a business that occupies property
Coronavirus Business Interruption Loan Scheme
Small and medium enterprises can claim an interest-free loan of up to £5m to help them through Covid-19 related difficulties.
This includes sole traders, freelancers and limited partnerships operating in all sectors.
To apply, discuss your business plan with one of the 40 accredited finance providers (not the British Business Bank) as soon as possible.
Note: Holvi wants to make sure you stay safe – physically and financially. To protect your money and avoid scams during the coronavirus situation, follow the guidelines set out by the Financial Conduct Authority.
While technically this is more general than just ‘sick pay’, you may be eligible for Universal Credit (UC) if you have a low income or are out of work. As a result of the coronavirus lockdown, many businesses are being forced to shut their doors, and the ones that stay open are suffering from lack of customers.
During the coronavirus outbreak, payments have been raised to £94.25 a week. This is still nowhere near enough to live on (that’s why Chancellor Rishi fast-tracked the Self-Employment Income Support scheme) – but every little bit helps.
Employment Health Allowance
You can apply for Employment and Support Allowance (ESA) if you have a disability or health condition that affects how much you can work.
ESA gives you:
Money to help with living costs if you’re unable to work
Support to get back into work once you’re able to
You can apply for ESA if you’re employed, self-employed or unemployed. And it’s possible to collect ESA and Universal Credits at the same time.
Statutory Sick Pay
When you hear ‘coronavirus’, your first question is probably about sick pay. Unfortunately, Statutory Sick Pay does not apply to sole traders – but if you’ve been hearing talk about it and want to learn more, here’s a quick summary.
The Government will fund the costs of Statutory Sick Pay (SSP) for employers with workforces of 250 people or fewer for up to 14 days.
Employers are able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of Covid-19.
If you can’t pay your self-assessment
If you’ve filed your tax return and owe less than £10,000 you might be able to arrange to pay in instalments online.
HMRC has pushed July 2020’s Payment on Account deadline to 31 January 2021 (the same day as the self-assessment deadline).
If you have problems paying your self-assessment, you can also contact HMRC to discuss your options.
IR35 changes delayed until 2021
IR35 is the UK’s tax legislation for off-payroll working rules. ‘The rules make sure that contractors, who would be an employee if they were providing their services directly to the client, pay broadly the same tax and National Insurance contributions as employees.’
Changes were scheduled to come into effect on 6 April 2020. Due to the coronavirus crisis, changes have been delayed until April 2021. We’ll cover more of this later.
Insurance – what compensation can you get?
Unfortunately, there’s no good news to report here.
The Association of British Insurers (ABI) has stated that standard policies did not include forced closure by the authorities. Their official message was this:
‘Irrespective of whether or not the government orders closure of a business, the vast majority of firms won’t have purchased cover that will enable them to claim on their insurance to compensate for their business being closed by the coronavirus.’
They added this comment:
‘A small minority of typically larger firms might have purchased an extension to their cover for closure due to any infectious disease. In this instance, an enforced closure could help them make their claim, but this will depend on the precise nature of the cover they have purchased.’
According to ABI, the industry’s view is that the sector has not been writing policies or collecting premiums to cover coronavirus, so it could not now be expected to pay out.
More news and information is available on ABI’s website.
At Holvi, we’re continually monitoring the latest developments and making adjustments to improve our support to small businesses. You can check out our Facebook page for news and discussions to stay connected. It might also help inspire some ideas on how to adapt your business as British society self-isolates – and you can read our latest motivational blog post on the Finnish mindset of sisu here.
On an optimistic note, although Holvians (what we call our employees) are also feeling the strain, we’re doing our best not to add to your problems. Our focus is on maintaining our high level of service so you can concentrate fully on adapting to the new business environment.
At Holvi, we’re monitoring developments around the clock and acting in accordance with the most current guidance from global health authorities. We’ve also established a crisis team and contingency plan to minimise disruption to business operations and continue offering you our support.