We'll be doing our best to keep the information in this piece up-to-date. Please check the UK government website for the most recent details.
The economy, like seemingly every fibre of normal life, has been disrupted. The U.K. federal government rushed in on 17th March with a £330 billion relief package to address the pain of those disruptions, for which we’re grateful. A lot of that relief is earmarked for people who’ve lost their jobs, people who can’t work, and people who have to file their taxes. Of course, now we all have to figure out what it means and how, and if, you qualify for what’s on offer.
This isn’t the final draft. There will be new rules, new efforts, new legislation. But here’s what we know right now. Keep an eye on this space and we’ll keep you abreast on changes when they happen.
Part One: Job Retention
Furloughed Employees (Coronavirus Job Retention Scheme)
What is it? The government announced a support package specifically for furloughed workers. You might ask: what does furloughed mean? A furloughed worker is someone who is fully employed but isn’t working, or receiving salary, for a set period of time.
What it means for me? The scheme will provide 80% of a furloughed employee’s salary, up to £2,500 a month, through this benefit. It should be noted that it is up to your employer whether they pay you the remaining 20%. The target delivery date of this 3-month package is April, with salaries covered from the beginning of March.
Self-Employed Income Support Scheme
What is it? On 26th March the government announced a support package specifically designed for self-employed people who are losing work because of COVID-19. The plan is meant to mirror the package offered to full time employees.
What it means for me? The benefit comes in the form of a taxable cash grant which will cover up to 80% of a self-employed person’s earnings, up to a limit of £2,500 per month. To be eligible for the grant you have to have filed a 2018/19 self-assessment claim and earn under the £50,000 mark. HMRC will use existing information on your past earnings to determine who will receive the grant with the 3-month program beginning in June.
Paid sick leave
What is it? Not all workers (typically freelancers, self-employed or contract workers) get paid sick leave through their employers. As part of this relief package, though, the government has promised Statutory Sick Pay (SSP) to full time employees who have to self isolate, quarantine or care for someone else in their household.
What does it mean for me? The SSP benefit will pay up to £94.25 per week for a period of up to 28 weeks. To cut down on red tape, the government will waive the usual requirement of a doctor’s note and instead require an ‘isolation note’ that can be applied for through the NHS 111 service online. The application process is available through the government here.
Part Two: Unemployment
What is it? If you, like so many other people, lost your job as a result of the pandemic, we’re sincerely sorry. This part hasn’t changed: the first thing to do is file for Universal Credit. You can find information about that here.
What it means for me? If you qualify for Universal Credit you are typically eligible for an allowance based on your personal circumstances. Starting on 6th April, the government has committed to increasing that allowance by £1,000 for the next 12 months - adding on an extra £20 per week.
Part Three: Taxes
Extended Tax Payment deadline (for self-employed)
What is it? People who are self employed typically pay taxes once or twice a year in July and January. Under the new measures, the government is allowing you to defer your summer payment until January 31, 2021.
What it means for me? You can now wait until next year to make your income tax payment. And you don’t have to apply for this payment extension - it’s available to anyone who is self employed.
Paying your tax bill on time
What is it? Time to Pay is a support system HMRC has in place for all businesses and self-employed people who may not be able to pay their tax bills on time. A new helpline has been set-up here.
What it means for me? You may qualify for an extension on your tax payments. HMRC will assess an individual or businesses’ need on a case-by-case basis with the service available by phone from Monday to Saturday.
Part Four: Other Benefits
Mortgage payment deferrals
What it is? Many people in the UK’s biggest investment is their home. But that means that for many people their biggest expense is their mortgage payment. It stands to reason that during these uncertain times, staying on top of mortgage payments could be a huge stressor. As part of the government’s announcement, all of the UK’s banks agreed to a ‘mortgage payment holiday’ where people can defer paying their mortgage for three months.
What does it mean for me? Obviously, if you don’t have the money to pay your mortgage as a result of the pandemic, you should take advantage of this. You’ll need to email or call your bank and make them aware of your predicament to take advantage of the benefit. It’s important to know that you’ll continue to accrue interest, and that interest will be added to the outstanding balance on your mortgage.