ESA is a type of sick-pay originally aimed at helping people who cannot work due to an illness or disability. In the recent budget, the government announced that they will extend ESA to give financial support to the self-employed during the Coronavirus crisis.
That’s is because when you are self-employed you are not eligible to claim statutory sick pay, like someone who is employed would do. So if you are a sole trader and forced to take time off work due to self-isolating, you could be eligible for ESA.
Employment & Support Allowance (ESA)
Under the new style ESA for the self-employed, you will be eligible to claim from the first day of needing to self-isolate, instead of the usual eighth day.
That means you should expect your first ESA self-employed payment around two weeks after you contract Coronavirus.
ESA is currently:
- £73.10 a week for over 25s
- £57.90 a week for under 25s
So depending on your circumstances, this may not be enough to bridge the gap if your income has totally dried up.
That being said if you’re facing a situation where your income is going down, then I advise you take advantage of all the income support you can. And don’t feel ashamed to ask for help. This is exactly the reason why we pay national insurance contributions.
How to Claim the Employment Support Allowance
To get ‘new style’ ESA you need to have been self-employed and paid enough National Insurance in the last 2 tax years:
You’ll also need to call 111 so the NHS can issue you with a letter confirming that you are self-isolating.
That means you needed to have kept up with your class 2 national insurance payments and paid them voluntarily, even if your business profits were below the threshold (something I have been urging my readers to do for years now).
Head over to the government website to check your eligibility or call the ESA helpline on 0800 169 0154
When Will You Receive Your Allowance
The government are promising that you will receive the money quickly. If this is your first claim for ESA you will receive the money immediately, as long as you have all the information you need to hand.
And even if it turns out you weren’t eligible you won’t have to pay it back.
New Here? Learn how to set up the financial side of your business with these easy to understand guides and resources:
- Sole Trader or Limited Company? – Download my free calculator to check which business structure would help you to pay less tax;
- Government Support For the Self-Employed During Coronavirus – Find out about the schemes available, which ones you are eligible for and how to claim;
- Tax Records and Bookkeeping – Understand what tax records you’ll need to keep and how to set up your own bookkeeping system;
- How to Fill In Your Tax Return Online – In this step-by-step guide, you’ll find everything you need to know to fill in your tax return online and beat the HMRC deadline.
- Self Employment Taxes Explained – Learn what taxes you’ll pay, how much and when;
- VAT Guides – From registration to de-registration, VAT schemes and thresholds, these guides will take you through the basics every UK small business owner needs to know;
- Invoice Template – Free template and step-by-step guide so you can get paid by your clients.