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Chancers of the Exchequer: Soothing News for the Self-Employed

By Jess Aszkenasy.

Coronavirus has burnt a hole in pretty much everyone’s pocket. Live stand-up comedy seems like a distant memory from Life BC. Remember when hecklers were a thing? Ha! What I wouldn’t give to have a man in a baseball cap swaying in a bar stool loudly tell me that I’m shit. One of the methods the government is using in an effort to avoid a complete (and I believe this is the official terminology) economic shitstorm, is rolling out support for the self-employed which should go live this month. It’s very similar to what furloughed employees have been receiving.

So, without further ado, here’s an explanation of how the new system will work, followed by some bits and bobs you can do to make your money go further during this time that don’t avoid panic buying bog-roll or selling various vital organs on the dark web. Corona sans kidney? Non, merci.

Self-employment Income Support Scheme: how does it work?

Let me start off saying that you can’t apply for this just yet. The scheme is set to go live on 13 May. According to the government’s website: “If you’re eligible, we will tell you the date you can make your claim from. If your claim is approved you’ll receive your payment within 6 working days.”

However, on Monday 4th May HMRC launched an online tool which allows self-employed people to check whether or not they’ll be eligible for this mysterious scheme.

If this “pre-application” tool says you're eligible, you’ll be given a date to apply for the grant. HMRC will also ask you to add in your contact details so they can prod you when the application system is up and running. If HMRC says you're not eligible, you'll be able to ask them to review their decision via the portal.

To be able to use the tool, you'll need to have your Self Assessment Unique Taxpayer Reference (UTR) number and your National Insurance number to hand. If you’ve lost either of these, here’s where you can find your UTR number and here’s where you can find your National Insurance number.

Just to clarify one last time you can’t actually apply for support yet. This is just a “teaser” of what’s to come. Financial foreplay amidst a global pandemic, if you will. Cheers Boris.

Ah, and before I forget, if you receive a text, call or email claiming to be from HMRC offering financial help or a refund and asking you to click on a link or give other personal info, don’t be fooled, ‘tis but a scam darling friends.

Anyway, back to the shiny new scheme. The grant you receive will be 80% of your average trading profit, to be paid out in a single instalment of up to £7,500 to cover March, April and May. HMRC is saying that it may extend the system to cover beyond these three months if the coronapocalypse continues.

You’ll be eligible for to claim financial support if you meet the following criteria:

  • You’ve submitted your self-assessment tax return for the tax year 2018/19

  • You “traded” (ie. gigged) during tax year 2018/19

  • You’re trading or would be trading at the time of application if it weren’t for coronavirus (and those meddling kids)

  • You intend to continue to trade and bring joy to audiences far and wide in the tax year 2020/21

  • You’ve lost trading profits to coronavirus.

Your total trading profits must also be less than £50,000, and more than half of your income should be from self-employment. To apply for a slice of the apocalypse pie, you’ll need to have these on your person:

  • Your Self Assessment UTR number

  • You National Insurance number

  • Your Government Gateway user ID and password (if you don’t have a user ID, you can create one when you check your eligibility online)

  • Your bank account number and sort code of the account you want HMRC to pay the sweet, sweet monies into.

To work out how much you’ll get, HMRC will add together your total trading profits or losses for the following tax years then divide the sum by three:

  • 2016 to 2017

  • 2017 to 2018

  • 2018 to 2019

HMRC will show you how they calculate how much you’re entitled to on their online portal, so you can report any errors that may occur. Once your claim is approved your money should be in your bank account within six working days.

If you do receive the grant you can still work, start a new trade or take on other employment during this time, or even as HMRC suggests, “take on duties as an armed forces reservist.” This will not impact how much you get. Phew.

Keep all records of your application, including how much you claimed, the claim reference number and evidence that your business has been adversely affected by coronavirus (for now they haven’t specified this further, but for comedians any evidence or communication you’ve been booked for XYZ gig could be a lead).

There are a few places you’ll need to report the grant on later on down the line:

  • On your self-assessment tax return

  • As self-employed income for any Universal Credit claims

  • As self employed income and that you’re working 16 hours a week for any tax credits claims.

You can also make a Universal Credit claim while you await the grant. The grant may affect the amount of Universal Credit you get, but will not affect claims for periods for Life BC (ie. March).

LAST BORING BUT EXTREMELY IMPORTANT DETAIL BEFORE YOUR EYES GLAZE OVER COMPLETELY AND I LOSE YOUR FOREVER: you may be able to defer the second payment on account of your self assessment tax bill.

The second payment on account (if you didn’t make the full payment on 31 January this year) is usually due on 31 July, but HMRC are allowing the self-employed to defer until 31 January 2021. More information on that here.

Things you can do to make your money go a little bit further during COVID-19:

  1. Ask for your bills to be put on hold. If you’re struggling to make ends meet, gas and leccy providers, water companies and some local councils are offering reduced tariffs or more affordable payment plans. The same can be said for some broadband and mobile phone operators. If you don’t think you’ll be able to cover your internet bill this month, get in touch to see if they can help you sort out a more affordable payment plan or, for the extra bold, you could even try haggling for a cheaper contract.

  2. If any travel you had booked has been cancelled by the company (especially if it’s flights), get a refund. A lot of airlines are offering vouchers instead of refunds at the moment for cancelled flights. If you’re considering accepting one, remember that if the airline goes bust (RIP Flybe), you probably won’t see your money again. And remember, under EU law, if your flight has been cancelled, you’re legally entitled to a refund. Ryanair, babes, did you get the memo?

  3. Cashback websites. At the risk of sounding like your mad aunt Bev, they are so worth it. Using TopCashback or Quidco (the Jimmy Carr and Katherine Ryan of the online cashback world #sorrynotsorry) every time you make a purchase could earn you a pretty penny depending on what you buy. For smaller purchases, you usually only get 5 or 6% back, but if you’re looking to take out insurance or change broadband provider you could get a lot more back. I got £120 when I went through TopCashback for my Virgin Media internet contract. BOOYAH.

  4. Online outlet stores. If you’re not checking the sales before you buy, you’re actually tripping. Loads of highstreet retailers have outlet shops on eBay. The likes of Tesco (for electronics), Argos, JD Sports and even Oliver Bonas have some great discounts on there, so head here first if you do need to make a slightly more spendy purchase during the pandemic. Also, Depop for clothes. Always.

  5. Financial spring cleaning. Go through your bank statements. Weed out any unused subscriptions that are still rolling month to month. If you’ve got a gym membership, or any other kind of membership that involves going to a public place that can’t be used at this time, make sure it’s been frozen during (and if it hasn’t it’s definitely worth investigating whether you can get your money back or get credit added to your account).

  6. Savings apps. Putting away money every month might seem nye-on impossible right now, but there are apps available that let you put away super small amounts of money that you don’t even feel leaving your bank account. They are designed with people who aren’t able to put away hundreds a month in mind. They work out what your average monthly spend is, how much you’ll need for the rest of the month, and then put away what they think you can manage. Sometimes it might just be a couple of pounds, but out of sight means out of mind, and putting a couple of pounds a way every week or so can add up to a decent amount at the end of the year (Edinburgh 2021 baby). Chip and Plum are pretty good (and safe). Alternatively, you can always set up weekly transfers of a v. small sum of money from your current account to your savings account, or to one of your “Pots” if you’ve got a Monzo card.

So there we have it. Love and finances in the time of Corona. For more info on the Self-employment Income Support System, visit the government’s website here.

Jessica Aszkenasy is a comedian and personal finance journalist at Save the Student where she writes about everything from Student Finance to strategies you can use to save money long-term.

She can be found on both Twitter and Instagram at @_goblinjess.

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