Measures have been announced by the Government to help self-employed people.
The Self-Employed Income Support Scheme has been adjusted to ensure parity with the Coronavirus Job Retention Scheme. The SEISS grant rate for the November to January period will increase from 40 per cent to 80 per cent of average trading profits, up to a maximum of £7,500. Increasing support for the self-employed will protect millions of jobs and give people and businesses the certainty they need over what will be a difficult winter.
HMRC will pay this increased grant sooner than previously planned, and in time for Christmas, and that the window for claiming will open earlier than previously announced, on 30 November.
The Treasury will review the level of the February-April grant and set this in due course, Treasury Ministers are aware of the strength of feeling on this issue.
Changes to the welfare system now ensure people who are self-employed can have full access to Universal Credit. In addition, the minimum income floor was suspended for 12 months, meaning self-employed people can now access Universal Credit at a rate that is equivalent to Statutory Sick Pay for employees.
Regarding support for directors of small limited companies, if you are paid a salary as a company director by PAYE, then you can be furloughed through the Coronavirus Job Retention Scheme. Salaried company directors are eligible to be furloughed under the Job Retention Scheme. A company, acting through its board of directors, can decide if one or more individual salaried director can be furloughed whilst in compliance with the company’s statutory duties such as those outlined under the Companies Act 2006. Any such decision should be formally adopted by a company, noted in its company records, and communicated in writing to the director or directors concerned. Individuals under furlough should not be working, however furloughed directors may fulfil statutory obligations they owe to their company by carrying out certain duties that might be reasonably judged necessary to do so. Furloughed directors should not do any work they would ordinarily be doing for the generation of revenue or provision of services for their company.
People who pay themselves through a mixture of salary and dividends will find that dividends are not covered by the Self-Employed Scheme. It would be very difficult to know whether any dividend payments are derived from an individual’s own company or dividends from other sources. If you are paid a salary as a company director by PAYE, then you can be furloughed for the Coronavirus Job Retention Scheme.
The £50,000 threshold was chosen after careful consideration, to ensure the help available is targeted at the most vulnerable individuals during this crisis. This threshold ensures that 95 per cent of those who are majority self-employed are covered by the scheme. Help is available through Universal Credit, anybody who has not met the qualifying criteria for SEISS and is genuinely in need should be able to claim through Universal Credit.