News: Latest government support for the self-employed explained Jump to main content

News: Latest government support for the self-employed explained

Chancellor Rishi Sunak has announced UK-wide changes to the Jobs Support Scheme (JSS), the Self-Employment Income Support Scheme (SEISS) and business grants in response to 'profound economic uncertainty'.

The details published so far can be found on the GOV.UK website but HMRC will provide more information about claiming and applications in due course.

JSS Open and JSS Closed

The JSS scheme has two elements, Open is the main scheme, while Closed is for the businesses legally required to close.

Following today's announcement, the rules for JSS Open are:

  • Employees must be working for at least 20% of their usual hours (rather than the expected 33%).
  • For the hours not worked, the employer must contribute 5% of an employee's regular pay (again rather than 33%) up to a monthly cap of £125 and the government will make up 61.67% of regular pay (again, increased from 33%) up to a monthly cap of £1,541.75.

These changes are welcome because the ISM has campaigned for reducing employer contributions previously. Employers can top up pay above their 5% contribution if they choose to but the grant will not cover National Insurance or pension contributions.

As before, the scheme runs for six months from 1 November 2020 and is open to employees on the payroll on 23 September 2020 - including staff on variable or zero hour contracts and regardless of if they had been furloughed. Companies with more than 250 staff will only be eligible if their turnover has not increased.

Under JSS Closed, for businesses closed due to restrictions, grants will cover two-thirds of normal pay up to a monthly limit of £2,100. There is no employer contribution, but again they can choose to top up this up. This system is complicated by the variation within the UK about the tiering system, with England and the devolved nations adopting different approaches to requiring businesses to close.

SEISS

In response to campaigns by the ISM and others, the SEISS is being extended for six months and the grant for the initial three-month period would be set at 40% of average trading profits, to a limit of £3,750. The arrangements for the second period have not been announced yet.

This represents progress as the government had previously planned to set it at only 20% with a cap of £1,875. However, the eligibility criteria remains the same and three million self-employed workers continue to be excluded.

Business grants

Businesses in the hospitality, accommodation and leisure sectors impacted by restrictions can apply for grants of up to £2,100 per month.

ISM reaction

The Incorporated Society of Musicians’ Chief Executive, Deborah Annetts, said:

‘Today’s announcement by the government represents an acknowledgement that their initial approach was insufficient and that more needs to be done to support the self-employed, including the thousands of musicians who cannot work while performance venues remain closed. Doubling support from 20% to 40% of people's income is a positive first step, but this is still far less than the original 70% level and three million self-employed workers continue to be excluded. Maintaining the existing level of support provided by the Self Employment Income Support Scheme and expanding the eligibility criteria is essential for preventing an exodus of highly skilled talent from our world-leading arts sector.

‘The performing arts need support to make it financially viable to reopen within social distancing safety requirements as a bridge until they can safely fully reopen and musicians can earn an income again. That is why the ISM is campaigning to #MakeMusicWork and calling for the creation of a new Freelance Performers Support Scheme. Containing both a cultural exemption on VAT for tickets and a guaranteed fee for each performer, this proposal puts freelancers at the heart of a sustainable funding model for venues. With musicians' livelihoods on the line, the government must implement funding that doesn’t just help the arts survive, but enables them to thrive once again.’