MORE than 3million self-employed people could be out of pocket due to the impact of coronavirus on their businesses.
But despite less government help being offered compared to for workers, there is some action the self-employed can benefit from.
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It comes as self-employed people will see take home pay fall by £781 a month on average if they have to claim Universal Credit compared to an 80 per cent wage guarantee (up to £2,500 a month) offered by chancellor Rishi Sunak for employed workers.
That's according to charity Turn2Us, which also saw a 1,800 per cent weekly increase in self-employed people using its benefits calculator on Friday.
David Samson, welfare benefits specialist at Turn2Us, said: "The exclusion from the coronavirus job retention scheme creates a huge disparity between salaried workers and the self-employed, penalising self-employed people by hundreds of pounds simply because of the nature of their employment."
And while ministers are working "around the clock" to draw up an emergency package of measures to help Britain's army of self-employed workers, here's what's been offered in the meantime.
Increased Universal Credit payments
Universal Credit is the controversial new welfare system, which replaces six benefits – including working tax credit and housing benefit – with one monthly payment.
You may be able to claim Universal Credit if:
- you’re on a low income or out of work
- you’re 18 or over (there are some exceptions if you’re 16 to 17)
- you’re under state pension age (or your partner is)
- you and your partner have £16,000 or less in savings between you
- you live in the UK
There's no set amount you can earn, or set number of hours you have to work, as these vary by claimant.
The Universal Credit standard allowance – the amount you're paid each month – currently ranges between £251.77 and £498.89 depending on your age and whether or not you're part of a couple.
You can get extra on top if you have children, a disability or health condition, or you care for someone with a disability.
But on Friday, Mr Sunak revealed he was upping these limits by up to £1,040 for new and existing claimants from April 6.
This is on top of a planned increase linked to inflation.
The rise is automatic so you don't need to do anything to get it.
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In addition, Mr Sunak suspended the self-employed Universal Credit minimum income floor for everyone affected by coronavirus.
He says this will enable more self-employed people to access the benefit at a rate equivalent to statutory sick pay for workers, which is at least £94.25 a week.
The Universal Credit minimum income floor applies to those who've been self-employed for more than a year.
It's the amount you're thought to earn each month, and is used to work out how much Universal Credit you get on top of your earnings.
But critics say the problem is that self-employed people's incomes fluctuates which means they can end up with less in benefits than those on fixed hours.
The idea is that the minimum income floor is the equivalent of someone of your age working full time on minimum wage.
If you earn below this level in any month, you are treated as earning the minimum income floor.
If you are earning more than the minimum income floor, your actual earnings are taken into account instead.
We're awaiting confirmation from the government on how this new measure will come in, and whether it will be for new and existing claimants.
Those off work from coronavirus may also be able to get help with their income loss by signing up to contributory Employment and Support Allowance (ESA) either instead or at the same time as getting Universal Credit.
To be eligible, you need to have worked as an employee or been self-employed and paid enough National Insurance contributions in the past two to three years.
Deferred income tax and VAT payments
The government has also given people longer to pay their income tax, extending payments due in July 2020 under self-assessment to January 2021.
VAT payments have also been delayed from now until June 30, although Turn2Us points out that most self-employed people earn below the £85,000 threshold to pay VAT in the first place.
Check if you're eligible for grants and loans
The government has launched a scheme to help businesses in England only (the rules are different elsewhere) with loans and grants but whether you qualify if you're self-employed depends on whether you're also a small business.
Under this, small businesses that already pay little or no business rates may qualify for a one-off grant of £10,00.
Here, you don't need to do anything as your local authority will write to you if you are eligible.
You may also be entitled to loan, mortgage and credit card payment holidays, as well as having interest or fees on debts frozen.
Contact your financial provider in the first instance to see what it's offering – although be prepared for long waits on the phone.
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