Self-employed musicians: Financial guidance (COVID-19)

What to do if you can’t work because you are sick or self-isolating

The Chancellor has announced that 'the self-employed can now access in full Universal Credit at a rate equivalent to Statutory Sick Pay for employees'. In addition, government is increasing the standard Universal Credit allowance by £20 per week on top of the planned annual uprating, whether you are a new or existing claimant.

If you are already receiving any of the benefits being replaced by Universal Credit such as Child Tax Credits, Working Tax Credits, Housing Benefit, Income Support or Employment and Support Allowance and you need to apply for Universal Credit because of coronavirus, you are strongly advised to speak to the ISM membership team or Citizens Advice before making a claim.

In addition to Universal Credit, some self-employed workers are also eligible to receive ‘New style’ Employment Support Allowance (ESA).
Claims for ESA are normally processed in around three weeks, quicker than Universal Credit which averages five weeks.

Generally Universal Credit is only available if you and your partner have savings of less than £16,000 whilst ESA is available even if your savings are more than this.

Download our chart below, which describes various scenarios and what you are eligible to claim for:

Scenarios for accessing benefits (sick/self isolating)

What to do if your income has dropped

We know that many musicians have lost significant amounts of work in a very short space of time. If your household has less than £16,000 in savings, you are eligible to apply for Universal Credit.

The amount of Universal Credit you will receive is based not only on your level of savings but also on your circumstances and the level of income of your spouse or partner.

The government has announced that it will temporarily abolish the Minimum Income Floor from 6 April 2020. For more information on this, see our advice page on Universal Credit .

If possible, you should consider waiting to apply for Universal Credit until after 6 April as this will allow you to claim Universal Credit without having to seek or actively work to make up your earnings during this time.

Other practical steps you can take to address your drop in earnings include doing an emergency budget, checking your insurance policies to see whether you have any income protection cover and talking to creditors if you think you are going to miss a payment. The Money Advice Service has a useful guide.

ISM members have access to a complimentary, no obligation consultation with a professional financial adviser and our debt advice page.

Other measures to support the self-employed

Tax

The next self-assessment tax return payment – due in July 2020 - has been deferred until January 2021.

If have an outstanding tax bill due at the moment and can’t afford to pay as a result of coronavirus, contact the HMRC dedicated coronavirus helpline on 0800 105 9559. Through its Time to Pay scheme HMRC can agree a bespoke repayment plan for self-employed individuals and businesses.

HMRC will also waive late payment penalties and interest during this period.

The changes to IR35, due to come into force in April 2020, have been postponed for a year.