What you are owed under the new coronavirus measures – and how to get it
- Credit: Archant
During the past few weeks the government has brought in an extensive range of measures to help people who may be left without work because of coronavirus.
They have promised to pay 80% of the wages for employees who are laid off because of lack of work and last week said they would pay the self-employed 80% of their average monthly earnings.
Peter Ellington, associate professor at Norwich business school and director of Triple Bottom Line Accounting, warned: “People aren’t getting all the information that is available, and there is misinformation out there.”
So what are you owed and how do you get it?
Last week the government launched new measures to help self-employed people through the coronavirus crisis. The government will pay the self-employed 80% of their average monthly earnings in the form of a grant paid directly from HMRC at the beginning of June, even if they are still able to work. If in previous years you have filed a self-assessment tax return, but you have not done one yet for this year, you have four weeks to do it under the measures the chancellor brought in last week.
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Mr Ellington said: “If you have a self assessment record and the trade section was completed, the government has all that in their systems.
“And they will be contacting those self assessment people and telling them that they’re entitled to an average of their trading profits and the inland revenue are going to calculate it and tell them what they’re entitled to.
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“They’ll be expected to confirm that it is the correct amount, and that they are still running their sole trade.”
But this grant will not be available to all self-employed people. “Unfortunately, it looks like a lottery which may have been won or lost.
“For example, if you’re newly self-employed and you don’t have a self assessment form for 2018-19 – for example if your business has just started – you won’t be qualified for any self employment subsidy.
“It is not for people with rental income. Landlords might have filled in a self assessment form but they don’t qualify because they’re not filling in the trading section of the form.”
Sole traders who are registered companies will also not be covered by the self-employed scheme, but may be covered under the furloughed workers scheme if they pay themselves a salary through PAYE.
However even this is not quite the same: “There’s an issue because the self-employed scheme you get it whether whatever, whether you are working or not.
“But, if you’re a company director then you’re claiming under the furloughed workers scheme and you can’t work.
“You’ve got to lay yourself off work,” he says, in order to claim under the furloughed workers scheme.
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“If you’re working for a company and raising invoices to your customers then you’re not furloughed. And if you’re running a team of people that are still working and they report to you then you’re not furloughed.
“But fiduciary duties, where you are responsible for the legal affairs of your company – for example filing returns to Companies House – we believe that doesn’t count as continuing to work for your own company.”
Employees who are paid through a PAYE laid off due to a lack of work because of coronavirus will continue to be paid by their company, and the government will refund the company 80% of the employees average monthly salary up to £2500 per month.
“With furloughed workers, the companies that they work for are running their payroll and the refund will be made from the government to the employers.
“It looks like they’re processing the employment furloughing subsidy relatively quickly. We’re expecting to see that towards the end of April.”
Employees on zero hours contracts are also protected by the governments measures. He said: “If you’re a zero hours worker, and you’ve been laid off, and you were on the payroll in February, and you’re still on that payroll, you are entitled to 80% of an averaged amount. But some larger employers possibly aren’t keeping right up to date with everything and they may not be paying their zero hours contract people because they don’t understand what they’re entitled to.
“If you’re a zero hours worker and for some reason you didn’t work in February then you won’t be entitled to anything.”
Those not eligible for the furloughed workers or for self-employment support could be able to claim universal credit in line with the value of statutory sick pay.