Support For Self Employed People Affected By Virus Isolation Measures

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July 12th 2020
Tax Week 14
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Support For Self Employed People Affected By Virus Isolation Measures

What support is there for self employed people who are struggling due to income losses through measures taken to counteract viral spread?

Last week the Chancellor Rishi Sunak unveiled his Budget where he had to carry out unprecedented loosening of the purse strings in order to help keep the economy afloat, and reassure the population, amid extraordinary measures currently being taken due to the spread of virus in the UK.

According to circulating information, the Chancellor was expected to deliver an aid package for those affected by the virus far exceeding the package as detailed during that Budget.

Today Sunak, as part of the daily briefings the public should now expect, spoke alongside Prime Minister Boris Johnson to unveil he would be extending his support. The measures are extensions to what he had already disclosed.

An Economic and Business Response Committee was chaired by the Chancellor earlier today and had given hints toward this position as in the meeting he had only confirmed the measures from the Budget and said further measures could be provided as information develops, but the key thing was no enhanced financial package for now.

Employees will receive SSP (Statutory Sick Pay) from their employers, who in turn will be able to reclaim from the government for up to 14 days of payouts. In addition to business rates reliefs and cuts from last week, Sunak extended the £3,000 cash grant to £10,000 for businesses that are currently eligible for Small Business Rate Relief or Rural Rate Relief. The businesses should seek assistance from their local authorities to make claims.

Businesses that are eligible for Business Rates Retail Discount, and have a rateable value of less than £51,000 will be able to now get a cash grant of £25,000.

Other packages such as loan support and emergency funds for SMEs are also in place, as well as likely bailouts for large businesses and infrastructure such as airports.

Unfortunately there was no mention of support for those that are self employed, freelancers or working in the gig economy. People in these sectors will have seen vast drops to their turnovers due to cancellations, isolation measures and general downturns to consumer behaviour.

There was no mention of renters (aside from housing benefit). Universal Credit basic element is worth £300 per month, leaving those with mortgages to fall back to SMI (Support for Mortgage Interest). This is calculated at 2.61 percent (max £200,000 mortgage balance), kicks in 39 weeks after claiming and would be a government loan repayable upon sale of the home.

Sunak has promised there will be a full package of employment support announced by early next week once his consultations with stakeholders are complete. We hope there is support to cover the shortfalls for these people that goes further than just the current ESA (Employment Support Allowance), Universal Credit Elements and 3 month payment holidays from mortgages.

There are hopes for suspension of rent and mortgages, as in Italy, as well as pausing utility bills along with council taxes to ease the burden until further notice. People in Ireland have been reassured by a €305 weekly sick pay benefit, from day zero and available to both employed and self employed people.

People who have tax bills coming up in July (under the payment on account system) should contact HMRC to seek to adjust their payments if they will struggle to make them or if their income and thus tax for the projected year will fall below estimates.

The economy could remain 'locked down' for up to eighteen months whilst a vaccine is developed, trialed and distributed so we eagerly await the next daily briefing.

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