Finance expert Martin Lewis has shared confirmation that the government will announce plans for addressing self-employed income by the end of the week. Here’s everything we know.
How is the government going to protect self-employed people during the coronavirus pandemic? It’s a question that still hasn’t been properly addressed.
Last week, chancellor Rishi Sunak announced increased benefits for the self-employed.
They are: VAT payments by companies deferred until the end of June; interest-free cash grants to small businesses; self-assessment income tax payments for July 2020 deferred for six months; increase in standard Universal Credit of £20 a week, with the same rise for those still on the working tax credit scheme; and nearly £1bn for those struggling to pay rent, through increases in housing benefit and Universal Credit.
However, he did not guarantee their wages.
According to the Office for National Statistics, there were 4.8 million self-employed people in the UK in 2018, which was 15% of the working population. So it’s understandable that so many people are worrying about their income over the next few weeks.
This is why Money Saving Expert founder Martin Lewis’ latest update for the self-employed and freelancers might bring some comfort right now.
Lewis started a Facebook video by saying the government has confirmed it is working on a support package for the self-employed. According to the finance expert, an announcement on the package will be made this week, “hopefully” by Friday at the latest.
Although Lewis doesn’t know what the package is, he predicts it should “put the self-employed in parity with employees who are getting 80% of their salary – up to £2,500 – paid by the government if they can’t work or there isn’t work available”.
He added an important message about trying not to panic, saying: “I know many of you are catastrophising, quite understandably, and looking at making huge changes, thinking there isn’t support coming.
“Well, hold on! Don’t make drastic changes yet – wait to see what that support package is. There is going to be a change so hold on. Please.”
Lewis also reiterated the importance of looking at the increased benefits.
Salman Haqqi, a personal finance expert at money.co.uk, has explained these benefits in more detail, telling Stylist: “Right now, if you’re self-employed, you won’t need to pay your Self Assessment Income Tax bill due in July 2020 until January 2021. You get more time if you’re VAT-registered, too – VAT payments are being deferred for three months, from 20 March 2020 until 30 June 2020.
“If you are self-employed, or earning less than £118 per week, you are not entitled to sick pay. However, if you have contracted coronavirus or are advised to stay at home, the government has made it easier to 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 one of sickness, rather than day eight, if you have Covid-19 or are advised to stay at home.”
He added: “The UK government has also removed the minimum income requirement for Universal Credit. In normal situations, the entitlement to universal credit would be calculated based on how much you earn in a month.
“But keep an eye on the news daily as the situation is fluid and many commentators expect the government to issue new guidance and help for those who are self employed or freelance in the coming days.”