Hundreds of thousands of self-employed may miss out on coronavirus government cash due to furlough and grant

Hundreds of thousands of self-employed may miss out on coronavirus government cash due to furlough and grant 1

HUNDREDS of thousands of self-employed Brits could miss out on vital coronavirus cash as they don’t realise they need to apply for furlough as well as the government grant.

Self-employed workers who earn up to £50,000 a year can receive up to 80 per cent of their profits lost due to a coronavirus-related disruption to their business.

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Hundreds of thousands of self-employed workers could miss out on valuable coronavirus grants

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Hundreds of thousands of self-employed workers could miss out on valuable coronavirus grants Credit: Getty Images – Getty

But HMRC has said the Self-employment Income Support Scheme (SEISS) only covers the portion of income made by working for yourself.

As thousands of self-employed workers also earn income via PAYE they need to be furloughed from this job in order to receive 80 per cent of that pay too.

For example, if you are an electrician who earns £26,000 a year working for yourself – and an additional £800 per month working part-time for an employer and are unable to work because of coronavirus, you would be entitled to both the self-employed income support and the job retention scheme.

This means you could get 80 per cent of your average monthly income from self-employment (roughly £1,400), plus an additional £632 from your employer.

What is the government’s furlough scheme?

Ff you are unable to do your job because of coronavirus and are in a PAYE role, your employer can use an online portal to claim 80 per cent of your wages, which it will then pay to you.

Claims are capped at £2,500 per month for each employee, so if you usually earn a lot more than that you’ll see a bigger drop in wages.

The scheme had been due to end on May 31, but the government announced on April 17 that it would be extended by a month until the end of June, 2020 and may be extended again if need be.

Your company can top up the remaining money you’d usually be paid, but most businesses are taking a serious hit and have chosen not to.

Bosses can also claim employer national insurance contributions and minimum automatic enrolment pension contributions on top.

The Coronavirus Job Retention Scheme is not supposed to be used for short-term sickness and there is a three-week minimum furlough period.

You should receive a letter from HMRC in June outlining what you need to do to apply for the self-employment fund, but this will not include the portion of your income that comes from your employer.

If you have been unable to work for them because of COVID-19, you should ask if they can furlough you and apply for the Coronavirus Job Retention Scheme, which went live last week.

More than 420,000 Brits earn through both self-employment and employment – and many could be missing out on a large chunk of the cash they are entitled to.

For self-employment, average monthly profits of up to £2,500 from the last three years will be used to calculate how much self-employed workers can claim.

It will only be available to people whose income comes mostly from self-employment – and is similar to the measures introduced by Chancellor Rishi Sunak for workers under the Coronavirus Job Retention Scheme.

What help is available to self-employed workers?

SELF-employed workers can receive up to 80 per cent of their profits lost because of Coronavirus from the government.

Average monthly profits from the last three years of up to £2,500 a month will be used to calculate how much self-employed workers can claim, for anyone earning up to £50,000 a year.

The scheme is similar to that promised to workers on the PAYE payroll.

But it will only be available to people who’s the majority of their income comes from self-employment and they must have been working for themselves for the past two years in a bid to cut back on fraudulent claims.

Average monthly payouts are thought to be about £940 each per month. 

Anyone who missed the January self-assessment deadline is also being given a four week extension to file their tax return.

Separately, employers are able to furlough workers who can not work because of Coronavirus and claim back 80 per cent of their wages – up to £2,500 a month – from the government.

A spokesperson from Community trade union said: “The crisis has exposed the inequalities faced by freelancers and the self-employed.

“Going forward it is clear we need long-term solutions to provide a safety net and additional protections for the self-employed and freelance community.”

An HMRC spokesperson said: “SEISS wouldn’t pay out money for earnings someone is getting from employment as it’s only for self employed income.

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“But there’s nothing stopping people from benefiting from both schemes, as long as they meet the criteria for eligibility.”

The Government has also said workers who have more than one job can be furloughed from multiple employers.

These measures will help more than 1 million Brits who work multiple jobs.

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