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Self-Employment | South Lakes Housing

Self-Employment

Financial support could be available if you are self-employed and your business has been affected by the coronavirus outbreak.

If your business can no longer operate, or if your earnings have been reduced, you may be able to claim Universal Credit. If you currently receive tax credits from HMRC, please be aware that if you apply for Universal Credit your tax credits award will end immediately, even if you are not eligible to receive Universal Credit. Find out more about tax credits and claiming Universal Credit.

And if you’re self-employed or a member of a partnership and have been adversely affected by coronavirus, you may also be able to use the Self-Employment Income Support Scheme (SEISS) to claim a grant.

You can no longer make a claim for the second SEISS grant. However, the scheme will be extended from 1 November. Read more about the extension to the SEISS scheme

You can make a claim for Universal Credit while you wait for a SEISS grant. When you receive the grant it may affect the amount of Universal Credit you get, but will not affect claims for earlier periods.

Flow chart explaining the basic eligibility rules for Universal Credit and SEISS

Universal Credit

1. Check your eligibility

If your income from your business has been reduced, or you are no longer able to keep your business going, you may be eligible for help from Universal Credit.

Whether you can get Universal Credit depends on your circumstances, including any savings you have. Your business assets will not be taken into account when working out whether you are eligible for Universal Credit, nor when calculating how much Universal Credit you will receive.

Other eligibility criteria apply. Read more about eligibility for Universal Credit

2. Apply

You should apply for Universal Credit online. If you currently receive tax credits from HMRC, please be aware that if you submit a claim for Universal Credit, your tax credit award will end immediately.

3. Receive financial support

If you’re eligible, the amount you receive will depend on your circumstances, and will take into account earnings from your own business or if you are working as an employee. If you are self-employed, it’s important to report any income you have received each month, including a SEISS grant. This includes reporting if you have had no income that month.

You will usually get your first Universal Credit payment about 5 weeks after you submit your claim. If you need financial help during that period, you can ask for an upfront repayable advance. This may be up to the value of your normal monthly Universal Credit payment, and you can get this without physically attending a jobcentre.

If you receive a SEISS grant or other large payment this may affect your next Universal Credit payment and could affect Universal Credit payments after that. Read more about surplus earnings

For more about any aspect of Universal Credit see the Understanding Universal Credit website, including information about Universal Credit and self-employment

Self-Employment Income Support Scheme (SEISS)

You can no longer make a claim for the first two SEISS grants. However, from 1 November the scheme will be extended. Grants will be paid in 2 lump sum instalments each covering a 3-month period.

The first grant will cover a 3-month period from 1 November 2020 until 31 January 2021. The Government will provide a taxable grant covering 40% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £3,750 in total.

The second grant will cover a 3-month period from 1 February 2021 until 30 April 2021. The Government will review the level of the second grant and set this in due course.

More details about the extended scheme will be published shortly.

Read more about the Self-Employment Income Support Scheme and the extension to SEISS

Watch videos about the Self-Employment Income Support Scheme

Find out about other help you could get

If you’re self-employed and claiming Universal Credit

The amount of Universal Credit you receive will depend on your circumstances, and will take into account your earnings, whether they are from your own business, from a SEISS grant, or if you are working as an employee.

If you currently receive tax credits from HMRC, please be aware that if you apply for Universal Credit, your tax credits award will end immediately, even if you are not eligible to receive Universal Credit. If your tax credits award ends, it cannot be re-opened and it will not be possible to make a new claim for tax credits in the future. Find out more about tax credits and claiming Universal Credit

If you are also claiming SEISS, this will be treated as earnings and so may affect your Universal Credit payment. If you are able to start working again, either full time or on limited hours, you may still be eligible to receive Universal Credit even if you are no longer eligible for SEISS. This will depend on your earnings. Find out more about how earnings affect Universal Credit payments

If you are self-employed and claiming Universal Credit, it’s important that you let DWP know about your income, so that your Universal Credit payment can be processed. This includes reporting if you have had no income at all. You will be prompted to report your income and expenses in your online account as you get close to your payment date.

Minimum Income Floor

The Minimum Income Floor assumes income at the level of the national minimum wage at the number of hours you would be expected to work based on your circumstances. This assumed level of income is then taken into account when your monthly Universal Credit payment is calculated.

To support self-employed claimants during the coronavirus outbreak, the Minimum Income Floor has been temporarily suspended. This means that self-employed claimants who have a Minimum Income Floor will have their Universal Credit payments calculated based upon their reported actual earnings, and not their Minimum Income Floor.

This temporary change has been brought in to help self-employed people with the immediate impact of coronavirus, and applies to all Universal Credit claimants. You will be informed before the Minimum Income Floor is reinstated for you.

Business assets

Please note that if you are gainfully self-employed none of your business assets will be taken into account when working out if you are eligible for Universal Credit, nor how much Universal Credit you receive. Business assets include things like machinery, premises and cash held in your business account.

If you are not winding-up your business you will not need to sell your business assets in order to apply for Universal Credit.

 

See the frequently asked questions on self-employment.