Advice for Self Employed and Employees

We will keep this page updated as each new initiative is outlined

Here’s the current picture as of Thursday 16th April regarding advice and support for employees and self employed.

(If you’re a small business please click to see our step by step guide to the various schemes and how to apply)

 

POSITION FOR EMPLOYEES ON PAYE

Furloughed workers

What does this mean? it means your company will be reimbursed 80% of your salary if they ask you to go home and sit it out. The support is initially for three months. It is called the Coronavirus Job Retention Scheme (JRS). This is to help companies keep going and keep their staff in preparation of restarting. There’s a ceiling for this support – no one will get, regardless of their pre coronavirus salary, more than £2500 a month (which is roughly £31,000 salary). So please let your employer know this is if your are on PAYE, as it could save your job – and the company!

Worth noting: you can’t work/generate income for your company while on furlough

• But you can work for someone else in that time – so if you’ve wanted to help with deliveries or any of the temporary jobs which have sprung up, or become a volunteer, that’s welcomed. You don’t have to sit at home doing nothing.
• You can be furloughed by a number of different companies if you have various PAYE part time jobs. 
• Your company needs to inform you in writing of their intention to furlough you and give a date from which you are expected to stay at home. Here’s a sample letter template from ACAS

The furloughing scheme is being launched on 20th April with payments due ten days later. We have explained the relevant information about it on our latest ‘essential information’ blog page for 16th April, which you can find here

 

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If you are unwell or are self isolating your employer will be entitled to  a rebate of two weeks sick pay/ SSP

If you can’t work because you’ve got the coronavirus or have to self-isolate, you’ll usually be entitled to the same amount of sick pay and leave from your employer that you’d get if you were off work with any other type of illness.

Employers can either offer statutory sick pay, which is the minimum they must pay you by law if you can’t work because you’re unwell, or some may provide their own more generous rates of sick pay. If you have coronavirus or have to self-isolate, you’ll therefore be entitled to either statutory sick pay or your usual sick pay.

To be eligible for statutory sick pay, which is £94.25 a week, you need to earn at least £118 before tax. In order to claim it, you’ll need to let your employer know that you’re unwell or self-isolating within seven days, or earlier if your contract states a shorter deadline. You only need a sick note if you’re off work for more than seven days.

Usually statutory sick pay is only payable from day four of your illness, but the Government has confirmed employees affected by coronavirus can now claim it from day one. This measure applies retrospectively from March 13.

If you are self-isolating, you can ‘self-certify’ for the first 7 days off work, which means you’ll have to let your employer know as soon as possible, but you won’t have to get a note from a doctor or NHS 111. If you’re self-isolating due to coronavirus for more than 7 days, you can get an online self-isolation note either from the NHS website or the NHS mobile phone app.

Visit ACAS to find out the latest advice for both employees and employers. ACAS stands for Advisory, Conciliation and Arbitration Service, an independent body that works to improve workplace relationships between employees and employers.

 

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26th March – announcement re self employed support (SEISS)

Please click here to read our up to date report and questions and scenarios about the help on offer

Here’s an overall summary:

• To be eligible you will need at least one years set of accounts to have already been filed for year ending April 2019. If you’ve not submitted your tax return, which was due 31st Jan, you have four weeks to get it in.

 

• If you’ve regularly been earning over £50k over the last three years, you may not be eligible at all. If your average income over three years is £150k or more, you will not qualify. If the average is under £150,000 you will qualify. If it’s one years trading it needs to not be more than £50k profit on your self assessment tax return.

 

• If your last three years trading figures AVERAGE out at £150k or below you’re safe.

 

• There is a cap on monthly payments. It’s £2500. This is taxable.

 

• And the monthly payment relates to 80% of your averaged out monthly profit.

 

• It will not be paid out til June at present.

 

• You do not need to apply. You will be contact by letter from HMRC. Be wary of scams asking you for your bank details to send you a rebate/transfer/whatever. Don’t input your bank details/payment details anywhere if you’ve received information ‘out of the blue’ from someone.

 

• The government are recommending you apply for Universal Credit and Employment and Support Allowance between now and June. It may be taken off your payment in June. TBC

 

• You can keep working and trying to earn some money if you can (unlike for furloughed employees who are at home)

 

• Also the Minimum income floor (MIF) for Universal Credit has been removed to help the self employed. This means that self-employed people whose businesses have collapsed can claim UC and potentially be entitled to a full award, equalising the treatment of self-employed people whose work has dried up and employees losing jobs. For example, a self-employed person earning around £20,000 annually would now have an income replacement rate of 85 per cent if their earnings fall to zero

 

• Payments on account – your July 31st payment won’t need to be paid in July – it will be delayed til January 2021 to give cash flow a chance to kick back in.

 

• VAT – if you pay VAT you don’t have to pay the amount you would have paid for the current quarter. It will be deferred til the end of the tax year. You don’t have to apply for this, it is being granted across the board to all businesses.

Self employed support (announced on 26th March) is not relevant for everyone – please click here to find out if it is going to help you 

If you are ineligible the government is suggesting that we can apply for something called the ‘new style’ ESA Employment and Support Allowance (ESA) and also Universal Credit.

There are different criteria for each one. Here’s the main differences:

• The ESA is the one which is being offered to the self employed who cannot work now. And is the equivalent of the level of SSP that an employee would be eligible for. You might have heard Boris Johnson talking about this. It’s £74.25 per week.

 

• There is ALSO Universal Credit to apply for, in addition, if the adults in the household have savings of less than £16,000. But if some of your savings are earmarked for your tax and national insurance payments, these apparently don’t have to count towards your savings.

 

Most self employed people are unaware of the criteria for these schemes as we don’t usually have money from the government. So please do check out to see if you can apply. It’s not much but it might pay for food? but as we said, more help is coming for self employed, so watch this space.

If you’ve not done this already, there are other options for reducing your monthly costs

• Contact your mortgage provider and access the three month ‘payment holiday’
• Contact anyone else – rent, utilities, leases and agree a reduced/deferred payment option

If you’d like to talk through this with us, about how ‘far to go’ with your regular payments, please call 01763 257882 or email David@theaccountancypractice.com. We’ve been helping our clients with this,  and have also had to adopt drastic measures ourselves and have been reassured by the reasonable reaction we’ve been getting. People seem to realise that this is serious and we’re not messing them around, it’s all about survival.

There’s more information below, but the translation seems to be that for most of us, we SHOULD be able to apply for the ‘new style ESA’ because they are relaxing the ‘eligibility’ criteria. Apparently.

One one page they’ve added ‘or not able to work’ to the ‘too ill to work’ criteria. But if you go on the actual site about the ‘new style ESA’ which they link to, it does not mention any reason for claiming other than sickness.

It’s possible that this page has not been updated (and certainly hasn’t since July 2019) because the Prime Minister implied that all self employed people who were not able to continue their business would be able to apply for a revised system, where they would be able to be given the same amount of money each week as an employee on Statutory Sickness Pay (SSP). Which is £94.25 a week. It is paid fortnightly.

The only criteria seems to be your National Insurance contributions over the last two years.

You need to have been paying them. Which will mean that most self employed people should be eligible.

You may need to apply for a ‘sick note’ or what’s now called an ‘isolation note’ and you can get this by visiting NHS 111 online, rather than visiting a doctor.

 

Applying for Universal Credit – If you’ve got less than £16,000 in savings between you and another adult in the household (if there is one) you may be able to apply for Universal Credit as well as ESA (Employment and Support Allowance). From April 6th 2020 the minimum income floor is being removed.
There is also help with rent costs through Universal Credit.

Click here to read more about ESA Employment and Support Allowance on the Government’s website

Click here to read more about Universal Credit

If you would like to talk to us about this, we’d be very happy to discuss your position. Even if we’re not your accountants. And we won’t charge you!

01763 257882 or email david@theaccountancypractice.com

If you’d like to know more about us please check out our website which is here 

 

THE OFFICIAL LINE from the government about the Employer schemes:

If your employer cannot cover staff costs due to COVID-19, they may be able to access support to continue paying part of your wage, to avoid redundancies.

If your employer intends to access the Coronavirus Job Retention Scheme, they will discuss with you becoming classified as a furloughed worker. This would mean that you are kept on your employer’s payroll, rather than being laid off.

To qualify for this scheme, you should not undertake work for them while you are furloughed. This will allow your employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month.

You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to.

If your salary is reduced as a result of these changes, you may be eligible for support through the welfare system, including Universal Credit.

We intend for the Coronavirus Job Retention Scheme to run for at least 3 months from 1 March 2020, but will extend if necessary.

Here are the other recommendations in ‘government speak’

Staying at home

If you have symptoms of coronavirus infection (COVID-19), however mild, stay at home and do not leave your house for 7 days from when your symptoms started.

If you live with others and you are the first in the household to have symptoms of coronavirus, then you must stay at home for 7 days, but all other household members who remain well must stay at home and not leave the house for 14 days. The 14-day period starts from the day when the first person in the house became ill.

See the stay at home guidance for more information.

Sick pay

You can get £94.25 per week Statutory Sick Pay (SSP) if you’re too ill to work. It’s paid by your employer for up to 28 weeks.

If you are staying at home because of COVID-19 you can now claim SSP. This includes individuals who are caring for people in the same household and therefore have been advised to do a household quarantine.

To check your sick pay entitlement, you should talk to your employer, and visit the Statutory Sick Pay (SSP) page for more information.

SSP start date

We are legislating for SSP to be paid from day 1, rather than day 4, of your absence from work if you are absent from work due to sickness or need to stay at home due to COVID-19. Once the legislation has been passed, this will apply retrospectively from 13 March. You should talk to your employer if you are eligible for SSP and need to claim.

Proof of sickness

If you have COVID-19 or are advised to stay at home, you can get an ‘isolation note’ by visiting NHS 111 online, rather than visiting a doctor. For COVID-19 cases this replaces the usual need to provide a ‘fit note’ (sometimes called a ‘sick note’) after 7 days of sickness absence.

Isolation notes will also be accepted by Jobcentre Plus as evidence of your inability to attend.

If you’re self-employed or not eligible for SSP

If you are not eligible for SSP – for example if you are self-employed or earning below the Lower Earnings Limit of £118 per week – and you have COVID-19 or are advised to stay at home, you can now more easily make a claim for Universal Credit or new style Employment and Support Allowance.

If you are eligible for new style Employment and Support Allowance, it will now be payable from day 1 of sickness, rather than day 8, if you have COVID-19 or are advised to stay at home.

 

Claiming benefits

Whether you are currently in or out of work, if you are on a low income and affected by the economic impacts of COVID-19, you will be able to access the full range of the welfare system, including Universal Credit.

From 6 April we are increasing the standard allowance in Universal Credit and the basic element in Working Tax Credit for 1 year. Both will increase by £20 per week on top of planned annual uprating. This will apply to all new and existing Universal Credit claimants and to existing Working Tax Credit claimants.

If you have COVID-19 or are staying at home

You are now able to claim Universal Credit, and if required can access advance payments upfront without needing to attend a jobcentre.

If you are self-employed

You are able to claim Universal Credit, providing you meet the usual eligibility criteria.

To support you with the economic impact of the outbreak, and allow you to follow government guidance on self-isolation and social distancing, from 6 April the requirements of the Minimum Income Floor will be temporarily relaxed. This change will apply to all Universal Credit claimants and will last for the duration of the outbreak.

New claimants will not need to attend the jobcentre to demonstrate gainful self-employment.

Support for rent costs

You should check your eligibility for Universal Credit, which is available for people in and out of work. Support for rental costs will be paid through Universal Credit.

From April, we are increasing Local Housing Allowance rates to the 30th percentile of market rents. This applies to all private renters who are new or existing Universal Credit housing element claimants and to existing Housing Benefit claimants.