Here’s an overview of the relief and support that’s available during the crisis.
The coronavirus pandemic is affecting everyone – in every market, industry and in every country. It doesn’t discriminate across any population, income bracket or race.
Ironically, while many small businesses may not survive this economic crisis, as a self-employed or newly self-employed person, you may be one of the fortunate individuals looking at an increase in business — as some small businesses and businesses-of-one flourish during an economic downturn.
For example, delivery services are seeing a huge boost as customers are turning to home deliveries and ordering everything from restaurant meals to groceries online during the lockdown. If you’re a freelancer — especially in digital marketing or ecommerce — then you may see a burst in work available as businesses across the country need to send out messages regarding the crisis and/or upgrade their online presence.
While the lockdown measures are in place, only “essential” businesses are able to remain open and operating.
As a result, small, independent businesses – from coffee shops to hairdressers – are struggling to stay afloat. Where it’s possible, they’re shifting their business models. Restaurants are offering pre-made carry-out packages of traditionally dine-in items along with standard counter “to-go” services. Yoga studios are offering classes via Zoom as opposed to in the studio. Even with these shifts, business is down considerably.
The decrease in business also has an immediate impact on self-employed and gig workers whose line of work may have catered to elective home services, such as interior designers and carpet cleaners — as many customers are waiting until the virus has dissipated before having others inside the home unnecessarily.
Help is available.
We get it. The day-to-day demands of finding work can be tough enough without a pandemic and economic downturn. With the current COVID-19 situation, they may simply seem overwhelming.
As the economy surges or wanes, you likely know how to adjust things to compensate under normal circumstances. For many small businesses, simply covering your expenses, seeing a little growth, and doing something you like along with good people defines success. A sudden halt in business and a significant drop in revenue, however, is a different story – especially if you have employees being sent home or let go due to lack of business.
To help offset the economic strain brought on by the pandemic, the UK government has developed emergency relief packages designed to help businesses, including self-employed individuals and gig workers — and they will likely affect you.
Your rights if you’re self-employed
The UK Government has announced that there will be help for the self-employed in the form of the new Self-employment Income Support Scheme (SEISS).
Under this scheme, self-employed workers can apply for taxable grants to combat thier loss of income due to the coronavirus pandemic. There is eligibility criteria, so we’ll explain what this is and how it works now…
You could get grants worth up to 80% of your profits.
The amount you can receive in a grant is decided on what your profits were over the last three years and is capped at £2,500 a month.
Because it’s a grant, you don’t have to pay this money back to the Government.
You must have filed a tax return for the year 2018/19.
This means you must have been self-employed prior to 6 April 2019. If you were due to file a 2018/19 tax return but missed the deadline this year, you’ll have until Thursday 23 April to submit your tax return and still be able to access the scheme.
If you’re recently self-employed and only have a few months’ self-employment on your 2018/19 tax return, this will be counted as your total profit for the year.
You must earn more than 50% of your total income from self-employment.
This will be calculated from your 2018/19 tax return or the average of your 2016/17, 2017/18 and 2018/19 tax returns.
Your average trading profit must be less than £50,000/year.
This is the cut off amount, so if you had an average annual trading profit of £50,000 or more, you won’t be able to get any support from this scheme.
For both these requirements, the Government says it will first check your 2018/19 tax return – if you met the requirements that year, you’ll be eligible.
However, if you earned more than £50,000 (or earned less than half of your income from self-employment) in 2018/19, the Government will then check your 2016/17 and 2017/18 tax returns, if you filed them for those years.
If on average over the three years you earned less than £50,000 and made more than half your income from self-employment, you’ll still be eligible.
When will I receive the money?
At this point, it looks like the scheme will start paying out in June and payments will likely be backdated to cover March, April and May as a lump sum payment.
The scheme will operate across the UK and is set to last for at least three months, though this could be extended depending on how long the protective measures to stop the spread of the virus are in place.
Can I keep working?
Unlike the employee scheme, as a self-employed person you CAN keep working. You also do not need to prove coronavirus impact – all who qualify will get it.
Finally, here are three ideas to encourage you
Even though you never could have anticipated this pandemic and the economic free fall that is accompanying it, there are some things that you can do now – especially if you have holes in your normally busy schedule and free time to be creative.
Offer new services
Have you been thinking of expanding your business with a new service or product line? Now might be the time to explore and experiment with those ideas.
If you’re like many, your employees – even contractors – are like family. Letting them go due to a sudden drop in business is probably one of the hardest things imaginable. If possible, use whatever means your business can provide to help them.
Use the time to learn and grow
Do you have paperwork that you have been putting off? A file drawer that needs reorganising? Or, are there areas of your physical business that need a good cleaning? Now is the perfect time to clean up and get buttoned-up. Plus, this will feel like you are doing something positive for your business – because you are.
At Invoice2go, we’re investing in developing tools and resources through articles like this — written by experts and provided to you for free — to help you optimise your downtime and upgrade your business for when the economy gets cranking again. You can even join our new Self-Employed Facebook Group or Advice2go For UK Trades Professionals Facebook Group to connect with others and enjoy even more tools and resources for free.
No one expected this pandemic to have such a rippling and damaging effect on our economy. And no one knows when it will finally end – but it will. Hopefully, the measures being put into place will help along with additional aid and relief that are just now being discussed. For now, focus on one day at a time, seek out the help that is being made available to you, and find ways to remain positive, knowing that we are all in this together.
Editor’s note: At Invoice2go, we make every effort to bring you the most current information that’s both relevant and helpful to you and your business. As the COVID-19 pandemic is still unfolding, please check back for updated articles. Thank you.