Frettens resident Chartered Tax Advisor, Lee Young, is one of a few solicitors in Dorset to be dual qualified as a Solicitor and Chartered Tax Advisor. In this article, he provides a summary of the budget tax implications.
UPDATE: The chancellor announced the new self-employed coronavirus Income Support Scheme on Thursday 26th March. For information, please follow the link below:
Coronavirus self-employed Income Support Scheme
In this article, Chris Dobbs, head of our specialist employment team, explains:
- What help is currently on offer for the self-employed during the coronavirus lockdown?
- Why is it taking so long for the government to announce further help for the self employed?
- When will the government announce the financial help for self-employed?
- What is a self-employed worker?
- How do I claim support as a self-employed worker?
When will the government announce help for the self-employed during the COVID-19 outbreak?
The chancellor stated in his last address, that a package of financial measures to help the self-employed unable to work during the coronavirus pandemic would be announced in “the coming days”.
The Prime Minister has now confirmed, on the evening of Wednesday 25 March, that Rishi Sunak will provide an update in the daily briefing, on Thursday 26th March.
His announcement of the coronavirus job retention scheme for people paid through PAYE on Friday 20th March was welcomed by many, as it provides an unprecedented financial package for employees.
Furloughed workers will receive 80% of their salaries from the government, up to a limit of £2,500 per month.
The measures have provided welcome relief both for employers and employees alike, the latter making up 90% of the workforce. However, the self-employed have been left without a similar level of help in what are extremely uncertain times.
What help do self-employed currently get during the coronavirus outbreak?
- Self-employed workers who are unable to work due to self-isolation or lockdown can currently claim Statutory Sick Pay (SSP) from day 1. This amounts to a maximum of £94.25 per week.
- The government has also announced that they can defer their VAT payments until June 2020.
- There is also the potential to apply for an interest-free business loan if certain conditions are met.
- Mortgage holidays up to three months can be requested from a number of banks.
Many self-employed workers have insisted that these measures alone are not enough. Tens of thousands of people have signed a petition to ask the government to pay the self-employed 80% of their median income during the coronavirus outbreak in line with the support being provided to those paid through PAYE.
So, why is it taking the government so long to announce help for the self-employed?
Rishi Sunak has said that "designing something that gets to the people who we want to help, while at the same time being affordable and not having to benefit absolutely everybody. That is proving to be problematic, but we are hard at work on it."
Why is help for self-employed problematic?
He outlined that the difficulties lay in establishing:
- Which self-employed workers had been genuinely impacted by the outbreak;
- Calculations would be based on tax returns that are 18 months out of date; and
- There is no system or infrastructure in place for checking and implementing. This would need to be brand new.
Who is a self-employed worker?
The problem is there is no legal definition of a self-employed worker and this is something that could also make the process of setting up support for them more difficult. Basically a person is self-employed if they do not come under the status of ‘employee’ or ‘worker’. The government itself says a person is self-employed if they run their business for themselves and take responsibility for its success or failure. Self-employed workers are not paid through PAYE, and they do not have the employment rights and responsibilities of employees.
How do I claim self-employed support during the coronavirus outbreak?
The government will hopefully release information as soon as it announces the new scheme.
In the meantime, you can follow this link to read the most up-to-date information.
https://www.gov.uk/guidance/help-and-support-if-youre-self-employed
Employment law updates during the coronavirus outbreak
We will post any announcements, along with advice for employers and HR professionals as soon as we are able. These will be shared on our website and on social media.
Our Employment and HR newsletter will continue to be sent out monthly, though as important information is announced by the government, we may send this to you more frequently.
Our quarterly employment seminars are postponed until further notice, though we are looking into ways of delivering these online.
We have a dedicated coronavirus page, where we will post links to all articles, fact sheets and downloads concerning the outbreak and implications for businesses.
