Coronavirus (COVID-19) Self-employment Income Support Scheme

Whilst trade union membership amongst self-employed people has been traditionally lower than amongst the directly employed, many unions have self employed sections. Unions in the arts and culture sector represent thousands of self-employed, gig and freelance workers. As employment practices have changed (for the worse) many workers who would previously been directly employed have been effectively forced to become self-employed – in construction, the energy sector and many others. Well before this crisis hit, unions were building membership amongst groups of workers such as taxi drivers.

Even where we do not have a direct representation role, unions know that self-employed workers, numbering more than 300,000 in Scotland, help to drive the economy. The majority are modestly paid and they need support just as much as directly employed workers.*

Unions have fought hard to secure support for self-employed and freelance workers as a result of Covid-19. Not a member? Join one today!

The UK Government has launched the Coronavirus (COVID-19) Self-employment Income Support Scheme to provide a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months.

There are still some things we are trying to find out. You can email us at asking to be kept updated or return to this site regularly. (Your data will be treated confidentially, consistent with data protection rules and will only be used for the purposes of giving information or seeking your views on this subject)

Coronavirus (COVID-19) Self-employment Income Support Scheme

1. Which union can I join if I am self-employed?

It can depend on what type of work you do. However, there are unions that specifically represent self-employed workers across a variety of different work areas as outlined in our introduction. By going to the list of our affiliated unions you will find the sectors they cover. If you are self-employed and working in one of those sectors, the union will almost certainly be able to join you up.

2. Am I classed as self-employed?

The difference isn’t always clear – in fact, battles fought over the classifications have taken up a lot of legal time – so you must seek legal advice if you are looking for a specific answer to your particular employment status (another good reason to join a trade union!).

However, in general terms, you are self-employed if you run a business for yourself and you carry responsibility for its success or failure. If you are self-employed you will not be paid through PAYE and you do not have the rights or responsibilities of employees.

Conversely, you are more likely to be an ‘employee’ if you work under a contract of employment, for ‘an employer’, and that employer makes deductions for tax and national insurance (PAYE).

The employment picture is further complicated by the ‘gig economy’, where workers are treated as contractors who perform bits and pieces of work i.e. ‘gigs’. This has increased the blurring between employed and self-employed workers.

For instance, zero hour contracts are similar to gig economy work – both sets of workers have no certainty about what they are going to be paid or even if they are going to get any work. But there are differences. Zero hour contracts are still contracts of employment that pay for the time worked, whereas gig economy work involves a company treating a worker as a contractor who is contracted for a specific service or performance of a specific task. The law is continuing to develop in this area – and it is always worth looking closely at your employment status.

3. Am I eligible for the Government’s Coronavirus (COVID-19) Self-employment Income Support Scheme?

You can use this scheme if you are • self-employed, or • a member of a partnership AND you have lost income due to coronavirus.

There are several other conditions you must also meet:

a. You must have traded and submitted your Income Tax Self-Assessment tax return for the tax year 2018-19. The deadline for submitting this tax return has been extended to 23 April 2020.

b. You must still be trading when you apply – or would be trading if it weren’t for COVID-19.

c. You must plan to continue to trade in the tax year 2020-21.

d. You must have trading profits that are less than £50,000 a year i.e. your profits are less than £50k for the year 2018-2019 and that amount makes up more than half of your total taxable income OR have average profits from 2016-2017, 2017-2018 and 2018-2019 of less than £50k and these profits make up more than half of your average taxable income.

4. I have been self-employed for less than a year, can I still apply?

Unfortunately, no, you do not qualify to make an application under this scheme.

You should check whether you are eligible for financial support from Universal Credit. You will find advice regarding Universal Credit here:

5. How much support will I get from the Government’s Coronavirus (COVID-19) Self-employment Income Support Scheme?

When the scheme opens for applications – and presuming you satisfy the scheme conditions - you will receive a taxable grant amounting to 80% of the average profits from the applicable tax years up to a monthly limit of £2500 (see above).

The average is worked out by HMRC who will add the profit from the individual years and divide by the number of applicable years.

This will be paid as a single grant amount into your bank account.

The scheme covers a three-month period in the first instance, from March to June 2020. The UK Government has said it will extend the scheme if necessary.

6. When will I get the financial support from this scheme?

The Government have indicated that you will get the support sometime in June. We will be monitoring the situation and will update this section when we hear more about precise dates.

7. How can I access the financial support?

The scheme is not yet open to applicants. The Government advice is that you should not contact HMRC just now. HMRC will contact you if you are eligible for the scheme and invite you to apply online.

8. I don’t qualify for the scheme, how will I support myself financially?

If you have been self-employed for less than a year and therefore haven’t yet completed a Tax Self-Assessment tax return for tax year 2018-2019, you may be entitled to apply for Universal Credit. You need to check eligibility criteria for this benefit.

If you are ill with coronavirus or self-isolating, you might be eligible for the updated version of Employment and Support Allowance, but only if you paid National Insurance contributions as an employee or self-employed person between April 2017 and April 2019. If you are ill, Employment and Support Allowance is now available from the 1st and not the 8th day.

In addition, those who are ill as a result of coronavirus will not be affected by the minimum income floor. The minimum income floor reduces the amount of support self-employed people can get through Universal Credit. The UK Government have yet to release details of how this will work in practice.

If demand for your work has stopped due to coronavirus; you don’t feel able to work because of the impact of social distancing; or you can’t work because you have caring responsibilities, you might qualify for the new version of Jobseekers Allowance. You will only qualify if you paid National Insurance contributions as an employee between April 2017 and April 2019.

If you have tax liabilities that you know you will struggle to meet due to COVID-19, you can apply to HMRC for Time to Pay arrangements. You can also access the Coronavirus Business Interruption Scheme to apply for assistance with loans and overdrafts. This Scheme means that the UK Government will provide lenders with a guarantee of 80% of each loan.

Further advice:

UK Government advice on the income support scheme for the self employed

Federation of Small Businesses in Scotland

STUC advice for employed workers

*Nothing on our site or provided in any email response to an individual enquiry, constitutes legal advice or is intended to give rise to a legal relationship between the STUC and any individual. Specialist legal or other advice should always be sought and taken in relation to your specific circumstances. The contents of our site and/or this email are intended for general information purposes only and you should not rely on them as definitive in relation to your situation.

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