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Coronavirus: Chancellor to announce support for the Self-Employed

The Chancellor of the Exchequer, Rishi Sunak, has already announced a wide-ranging package of measures to mitigate the impact of the Covid-19 pandemic on employees, but government support for self-employed workers has been less forthcoming.

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Published 25 March 2020

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However, the House of Commons Public Bill Committee has now sought to include protection for the self-employed under an amendment to the Coronavirus Bill currently before Parliament (which we expect to be passed swiftly). It proposes that freelancers and self-employed workers should receive guaranteed earnings of:

  • 80% of their monthly net earnings, averaged over the last 3 years; or
  • £2,917 per month,

whichever is the lower.

If accepted, which is expected, this amendment will bring support for self-employed people in line with the support offered by the Covid-19 Job Retention Scheme available to employers.

This may well be subject to tweaks and amendments as it goes through the legislative process and will come as welcome news to the self-employed.

This proposal is in addition to the following measures which were previously announced to support self-employed workers:

  • The next self-assessment income tax payment due on 31 July 2020 will be deferred until 31 January 2021; and
  • The next quarter of VAT payments (20 March 2020 to 30 June 2020) will also be deferred automatically and taxpayers will be given until the end of the 2020/21 tax year to pay any liabilities. VAT refunds and reclaims will continue to be paid by HMRC as normal. HMRC advise that if you normally pay your VAT by direct debit you should cancel this directly with your bank.

If you are self-employed and cannot work because you contract Coronavirus, the proposal is that you will be able to make a claim for the ‘new style’ Employment and Support Allowance (payable from the first of sickness, rather than day eight) or Universal Credit more easily due to changes the government has introduced.

If you are already receiving Universal Credit, then the Minimum Income Floor will be temporarily relaxed to ensure that self-employed Universal Credit claimants will receive support.

We will update our guidance for self-employed workers following a further announcement by the government, expected on 26 March 2020.

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Shorter Reads

Coronavirus: Chancellor to announce support for the Self-Employed

The Chancellor of the Exchequer, Rishi Sunak, has already announced a wide-ranging package of measures to mitigate the impact of the Covid-19 pandemic on employees, but government support for self-employed workers has been less forthcoming.

Published 25 March 2020

Associated sectors / services

  • Employment law for employees
  • Employment law for employers

Authors

However, the House of Commons Public Bill Committee has now sought to include protection for the self-employed under an amendment to the Coronavirus Bill currently before Parliament (which we expect to be passed swiftly). It proposes that freelancers and self-employed workers should receive guaranteed earnings of:

  • 80% of their monthly net earnings, averaged over the last 3 years; or
  • £2,917 per month,

whichever is the lower.

If accepted, which is expected, this amendment will bring support for self-employed people in line with the support offered by the Covid-19 Job Retention Scheme available to employers.

This may well be subject to tweaks and amendments as it goes through the legislative process and will come as welcome news to the self-employed.

This proposal is in addition to the following measures which were previously announced to support self-employed workers:

  • The next self-assessment income tax payment due on 31 July 2020 will be deferred until 31 January 2021; and
  • The next quarter of VAT payments (20 March 2020 to 30 June 2020) will also be deferred automatically and taxpayers will be given until the end of the 2020/21 tax year to pay any liabilities. VAT refunds and reclaims will continue to be paid by HMRC as normal. HMRC advise that if you normally pay your VAT by direct debit you should cancel this directly with your bank.

If you are self-employed and cannot work because you contract Coronavirus, the proposal is that you will be able to make a claim for the ‘new style’ Employment and Support Allowance (payable from the first of sickness, rather than day eight) or Universal Credit more easily due to changes the government has introduced.

If you are already receiving Universal Credit, then the Minimum Income Floor will be temporarily relaxed to ensure that self-employed Universal Credit claimants will receive support.

We will update our guidance for self-employed workers following a further announcement by the government, expected on 26 March 2020.

Associated sectors / services

  • Employment law for employees
  • Employment law for employers

Authors

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