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Self employed

On 26th March, the Chancellor announced a new scheme  to help self-employed workers. Like the scheme for employed people,  it covers up to 80% of someone’s earnings, with a cap on payments of £2,500 per Month. To be eligible for the scheme, you have to have submitted accounts or a tax assessment for the 2018-19 financial year (so people who started trading too recently to have these wont qualify),and the payment will be based on the average of the last three years returns (if you have less than three returns because you haven’t been trading long enough, an average of the returns you have made will be used). The payment will be made as a single lump sum to cover the whole three Month period, and is expected in early June.

The scheme is expected to be operational from early June, but those with self employed profits of more than £50,000 will not be eligible for any assistance. Also, to be eligible for the scheme, more than half of your income will need to come from self-employment. If this is the case, help would not be available to replace income lost by self-employed “side-lines” undertaken alongside an employed job.

If your income has reduced (or indeed gone completely) due to the virus, but you don’t qualify for the scheme, it is likely that you will be able to make a claim for benefits. To get an idea of what you might be entitled to, you can use a benefit calculator such as the one at https://www.betterofcalculator.co.uk/free  (this is actually a basic version of the calculator our own teams use, and others are available as well). Alternatively (or if you would just like some help having run a calculation), you can contact our financial inclusion team on 0208 768 7925 or by email at Jherbert@hexagon.org.uk  Although it might take a bit longer than usual to respond to queries, we are still here to help.

You can also claim Universal Credit if you are eligible for the scheme, but have no income in the meantime. If you do this, the income you receive from the self employed scheme will all be classed as income in the Month you receive it. This has the potential to create “surplus earnings” and impact your future eligibility for benefits. If you are potentially in this situation, contact our financial inclusion team using the details above for further advice.

There is also a significant temporary change being made to benefit rules from 6th April, that will enable you to make a claim for benefit based on your reduced current income.This means that many self-employed people who couldn’t previously get help from the benefits system will now be able to.

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