Help Available For Self-Employed During Lockdown | moneyfacts.co.uk

Derin Clark

Derin Clark

Online Reporter
Published: 03/11/2020

More financial help has been made available during the November lockdown for those who are self-employed, but freelancers have not been included in the new support scheme.

What financial help is available to the self-employed?

Chancellor Rishi Sunak has announced that those who are self-employed can claim for up to 80% of profits during November through the Self-Employed Income Support Scheme (SEISS). This is an increase from the 40% of past average monthly trading profits up to a maximum of £3,750 for three months between November to January that has previously been made available. It should be noted that the higher rate of 80% is only available for the November month.

In addition to this, those who are self-employed can also continue to apply for support loans aimed at businesses until 31 January 2021, which is an extension from the original deadline of the 30 November for some of these loans.

Who is eligible for self-employment support?

In order to claim for SEISS, more than half of the applicant’s income needs to come from self-employment. Previous schemes, which are likely to continue with the new financial support packages, were available to those with trading profits of less than £50,000 in 2018/19, or an average trading profit of less than £50,000 from 2016/17, 2017/18, 2018/19.

How to apply for self-employment financial support

SEISS is applied for directly through HMRC, which uses existing information to identify those eligible and invites applicants. If the applicant can confirm they meet the eligibility criteria the money is paid directly into the applicant’s bank account.

Who will not receive financial support?

A number of those who are self-employed will not be covered through the scheme. For example, those who pay themselves a salary and dividends through their own company are not eligible, but if they pay themselves through PAYE, they can apply for financial support through the Government’s job retention schemes.

As well as this, those who are newly self-employed will not be covered, as HMRC will not have records of their self-employment status or potential income and profits.

What financial help is available for freelancers?

A large group of workers not covered through SEISS or job retention schemes are freelancers and contractors. Those in this situation will likely be able to claim for Universal Credit. The standard Universal Credit allowance for those who are single and aged 25 and over is £408.89 per month, while for couples aged 25 or over it is £594 per month for both. Those under the age of 25 and who are single can receive £342.72 per month and couples can receive £489.59 per month for both. More information about Universal Credit can how to apply can be found on the Government’s website.

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