COVID-19 Self-Employed Income Support Scheme: Frequently Asked Questions (via BECTU)

These answers have been put together based on government guidance. This is a very fast-moving situation and this is Bectu’s current understanding of the scheme, however this may change!

What help is there for those that are PAYE that move from contract to contract?

If a worker was employed on a PAYE scheme somewhere before February 28, their erstwhile employer can effectively re-hire them, and put them on furlough, with an 80% subvention from the government. This is, however, entirely dependent on the will of the employer to do it and Bectu will be applying that pressure wherever possible.

What support is available to workers who provide their services through their own Limited Company?Unfortunately, these people are specifically excluded from the scheme to aid self-employed workers, if they “pay themselves a salary and dividends through their own company”.If they were operating a PAYE system on or before February 28 this year, and were themselves on the payroll on that date, they may be able to put themselves “on furlough” and apply to the Coronavirus Job Retention Scheme for a grant equivalent to 80% of their average earnings.In most other circumstances there is little government assistance at this time. Bectu Sector of Prospect is still lobbying the Treasury and politicians for a support package for workers in this situation.Meanwhile, you may be eligible for Universal Credit, which is not generous, and involves a means-test, but is still worth applying for.Your business may be eligible to apply to the Coronavirus Business Interruption Loan Scheme, run by the British Business Bank, which most self-employed, and PSC people, working in Bectu sectors, should qualify for on the primary criteria. However, you will then face credit checks by the commercial lenders participating, who have been delegated to make all decisions about loans. There will also be a need to pass a business viability test, and you may not want to resort to credit that is extended only as an unsecured personal loan, despite the 12-month interest-free period.

Can we claim Universal Credit until being able to claim the grant(s)?YesI am a freelancer, but I have a LTD company, of which I am director. Strictly speaking, that means I am employed. The wage I take is low though, because I also take dividends. I’m still very confused about how much I could claim and how I could claim it.You can only claim support as an employee if you have been paying yourself through a PAYE scheme, and in particular, need to have been on payroll on February 28th to access the Coronavirus Job Retention Scheme. Workers in your situation are specifically excluded from the support scheme for the self-employed, but you may be able to apply to the Coronavirus Business Interruption Scheme. Additionally, you may qualify for Universal Credit.

I am not clear if people who are “freelancers who are routinely employed on PAYE fixed term contracts” will be able to qualify for the 80% relief if they weren’t in employment in Feb/Mar? They probably don’t do tax returns at the end of January (though they will be getting rebates in April) – will there be a way for them to apply for the relief?To qualify for the 80% payment from the Coronavirus Job Retention Scheme, a worker needs to have been “on payroll” on February 28. Depending on the precise payroll arrangements operated by an employer they may have worked for, they might qualify on the basis of being employed in the period before this date, but will have to discuss this with companies they may have worked for, who are under no obligation to take advantage of the “furlough” provision.

Am I correct in understanding that people who have just entered the Self Employed market without any prior record of earnings – will they only be able to apply for Universal Credit?The key criterion for access to the Self-employed Income Support Scheme it that you need to have filed a self-assesment tax return for 2018-19, either by the January 31 deadline this year, or within a current window opened up by government, which closes on April 23. Anyone who commenced self-employed activities after April 6 2019 is therefore excluded from the SISS, even though they will be declaring income from the 2019-20 tax year in their first self-assessed return to HMRC.

Am I right in understanding that not anyone who earns over £50,000 will be able to apply for anything?The £50,000 ceiling applies only to the Self-employed Income Support Scheme. Workers with income over this level are still free to operate the 80% “furlough” system if they are in a Limited Company with a PAYE scheme, and, along with self-employed workers, can apply to the Coronavirus Business Interruption Loan Scheme. They should also apply for Universal Credit.

Is it possible that the Chancellor is giving a coded “you can repackage your earnings as ‘income’ instead of ‘dividends’ in that offer to extend the January filing deadline?It’s very hard to ‘resubmit’ previous tax assessments, so that seems unlikely.

Has Bectu actually heard of any production companies that have successfully managed to be provided a grant for their short-term PAYE employees? If they’ve heard of anyone who was successful, what was the criteria in which they were able to get the grant? If they’ve heard of anyone who was rejected, why was that and are we in trouble?Yes, we have heard reports that this happened, and are advising members to approach any employers they may have worked for in the run up to the February 28 qualifying date.

What are your actual options if (like me) you were in a short-term PAYE contract, it was terminated mid-contract, and your basically a sitting duck until you hear from your employers as to whether they got the grant or not?You will have to keep pressing the previous employer for the best outcome, and don’t wait for them to get in touch.

What if your employer doesn’t get the grant, even though you were mid contract? Where do you go from there?They should do – we’d like to hear of examples of them not getting it.Send these examples to If you can’t access the 80% grant, you need to claim Universal Credit.

What if you were looking for a job? We are never normally out of contract for more than a month of a time, but now, there are some of us that are facing months of unemployment with no what-if-PAYE-scenario to cling to.We are hoping that previous employers will re-engage, if the system allows this, but seeking a job is not treated the same as actually being in employment.

What if you were about to start a PAYE contract and it was terminated before it even started?This depends on the provisions in your contract for termination by the employer. Under contract law there may be scope that there has been a repudiator breach by the employer, but this would be undermined by the existence of a carefully-worded force majeure clause, or if the employer successfully argued that the contract had been “frustrated”.

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