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COVID-19; what it means for Self-Employed Individuals








The Government now requires everyone in the UK to practice ‘social distancing’. This means we must try and stop unnecessary contact with other people. This is significant for our jobs, as ‘social distancing’ means working at home where possible, avoiding busy commutes on public transport and cancelling face to face meetings.

Employers are under an obligation now to help their workforce take these steps but what happens to self-employed individuals who do not have the same employment law rights and protections?

The concern for so many people at the moment is about their legal rights and how this is going to affect their businesses, their reputations and their livelihoods due to COVID-19, whether due to symptoms, a choice of social distancing or childcare issues.

We have put together a summary of some of the proposed Government support plans to help you navigate this difficult time.

An outline of Government support:

  • On 26th March 2020, the Government announced details of a rescue package for the self-employed, which will offer a form of self-employment income support whereby self-employed people should receive guaranteed earnings of:

(a)  80% of their monthly income, which can be averaged over the last three years; or
(b)  £2,500 per month
whichever is the lower.

This effectively means the Government will ‘top up’ self-employed workers’ earnings to the lower of 80% of their net monthly earnings or £2,500 a month.

Details to be aware of are as follows:

– The scheme is open to anyone with trading profits up to £50,000 per annum; if a self-employed person earns more, they will not qualify.


– A self-employed person will need at least one year of accounts and to have submitted a self-assessment tax return for tax year 2018/19 to qualify. If someone missed the January deadline, they have a four week extension (running from 26th March) to now submit that tax return.


– Self-employed income must be the majority of a person’s earnings to qualify i.e. if someone is employed, but also has a self-employed business which earns them additional money, they are unlikely to qualify.


– HMRC will contact potentially eligible self-employed people asking them to complete an online application form and once processed, the income support will be paid directly into bank accounts. There is no immediate action that self-employed people need to take. The Government has however warned that it will be June before these payments begin, so unfortunately this will not assist with immediate cash-flow issues. The other benefits and suggestions listed below may help with immediate cash-flow measures, until this income support comes through.


– The scheme will be available for at least three months.

  • The next Income Tax self-assessment payments will be deferred until January 2021.
  • Introducing ‘Time to Pay’ arrangements – a time-limited deferral period on HMRC liabilities owed and a pre-agreed time period to pay these back – for businesses and self-employed individuals in financial distress and with outstanding tax liabilities. Applied on a case by case basis.
  • HMRC has set up a dedicated COVID-19 helpline to help those in need, and they may be able to agree a bespoke Time to Pay arrangement. HMRC will also explore waiving late payment penalties and interest where a business experiences administrative difficulties contacting HMRC or paying taxes due to COVID-19. The helpline number is 0800 0159 559 and is open 8am-8pm Monday to Friday and 8am-4pm on Saturdays.  The line will be closed on Bank Holidays.
  • A new, temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, to support businesses to access bank lending and overdrafts. The government will provide lenders with a guarantee of 80% on each loan.
  • Support for households affected by Coronavirus by providing mortgage payment holidays of up to three months.
  • The proposed rollout of tax reform IR35 to the private sector in April has been postponed for one year to April 2021 as a result of COVID-19.

Laura Richards and Lucy Burrows, BPP Pro Bono Centre, BPP University