I appreciate that this is an extremely confusing and difficult time for everyone, particularly for the five million self-employed workers across the UK, many of whom have lost their income overnight due to COVID-19. My Labour Party colleagues and I are calling for the self-employed to be covered by the Coronavirus Jobs Retention Scheme (where government pay 80 per cent of furloughed employees’ wages).
This afternoon (24 March) the Chancellor, Rishi Sunak, said that employees on zero hours contracts could be eligible for support under this, as long as they were part of a Pay as You Earn (PAYE) scheme. However, I appreciate there are still gaps in the system and confusion about what coverage is available for the many different kinds of self-employed and freelance workers in our community.
I am sorry I cannot yet provide more information on the help available for the self-employed as, this afternoon, the Chancellor said that the government requires more time to put together a package of support. (You can view the Chancellor’s comments here). It’s thought that support for the self-employed is taking so long to set up because:
- It’s not straightforward to identify who is and who isn’t self-employed. Of the five million defined as self-employed at any one time, roughly one million were self-employed last year but are not now. Another million who weren’t self-employed last year now are.
- The wages of the self-employed can be intermittent so defining their regular pay packet is very hard and therefore difficult for the Treasury to underwrite accurately.
- HMRC has the bank details of those that are on the PAYE tax system. But it does not hold those details for many self-employed people who file their tax returns in arrears.
- The Treasury claims that some self-employed people may be unaffected by the current situation (although it’s difficult to think of many examples of this).
Despite these difficulties I will continue to put pressure on the government to urgently provide the support my self-employed constituents so desperately need. In the meantime, the measures that the government has so far announced which could be of assistance the self-employed are as follows:
- Sick or self-isolating self-employed workers can access Universal Credit (UC) at the same rate as employees would claim Statutory Sick Pay, £94.25 per week. Previously this was available from day four of sickness but is now being made available from day one. The first step to claiming this is to get an isolation note from the NHS, which you can do here.
- Self-employed people can apply for new-style Employment Support Allowance by calling the UC helpline on 0800 328 5644, which is open between 8am and 6pm. They will ask you to fill out a claim form, which can be done by email, and looks like this.
- It’s also much easier to claim UC because a cap to payments known as the minimum income floor — which effectively curtailed the benefits given to the low-earning self-employed — has been temporarily suspended. The amount you get depends on your circumstances, but the first step is to create a UC account and give some details about your income, savings and outgoings, which you can do here.
- The July 2020 self-assessment tax payment deadline, which is paid by some self-assessment taxpayers who make advance payments on their bill, has been pushed back to January 2021. This means that those expected to pay some of their bill in July, will now be expected to do so in January. There will be no late payment penalties until this time and workers don’t need to do anything.
- VAT bills from now until the end of June will be deferred until the end of the tax year, in April 2021. If you’ve missed an outstanding tax payment or think you might miss your next payment, HMRC urges people to contact its dedicated Covid-19 helpline on 0800 0159 559.
I appreciate that many of the government’s measures just aren’t good enough – even the Health Secretary Matt Hancock has admitted that he couldn’t live on £94 per week Statutory Sick Pay. The government’s plans so far simply don’t leave families with enough to live on and that’s why I’ll continue to speak up for my self-employed constituents to make sure they receive adequate support during this crisis.
I’ll let you know when I receive more concrete information from the government and do check my website www.kategreen.org/covid-19/ for all of my latest updates.