⚠️ We are working hard to ensure this guidance is up to date. However, you should bear in mind that things may change as the government respond to the ongoing situation.

Coronavirus: Self-employment: illness or self-isolation

Updated on 13 January 2021

The coronavirus (COVID-19) outbreak is having far-reaching financial impacts on individuals and businesses across the UK, and indeed across the world. You may be worried about a reduction to your income or that you may lose your work. This page tells you what you may be able to claim. 

This page explains what sickness benefits may be available for self-employed individuals. If you are self-employed and have found your hours reduced or your self-employed work has stopped completely see our other guidance for help that may be available.

coronavirus quarantine sign on a door
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I am unable to work due to illness or self-isolation

Statutory Sick Pay (SSP) is not available for the self-employed. If you are unable to work because you are ill or are self-isolating then you may be able to claim new-style Employment and Support Allowance (ESA) if you have paid enough national insurance contributions.

Self-isolation refers to people who are following government guidance to self-isolate. There is also guidance on social distancing for 12 weeks aimed at people aged 70 or older, under 70 with underlying health conditions and those who are pregnant and guidance on shielding for those defined on medical grounds as extremely vulnerable. It is not clear at the current time whether people who fall into the social distancing/shielding groups are entitled to new-style ESA.

Pension income may be taken into account for new-style ESA, but otherwise it is not affected by any savings or your partner’s income. You can find out how to claim on GOV.UK.

If you have not paid enough contributions to claim new-style ESA or if it is not enough to cover your outgoings, you may need to apply for other benefits.

The main benefit is universal credit (UC) which is gradually replacing six other benefits: working tax credit, child tax credit, housing benefit, income support, income-related employment and support allowance and income-based jobseeker’s allowance. The majority of people can no longer make claims to these other benefits, although there are two exceptions. Instead, if you need financial support you will need to claim UC.

You should also be aware of the following:

  • If you or your partner get or have recently received a severe disability premium in certain benefits or are classed as a ‘frontier worker’ you may be able to make a claim for one of the benefits that UC is replacing. See our information in the main part of our website. This is complex and you should seek advice BEFORE making any UC claim if you think this might apply to you.
  • If you are currently receiving any of the benefits UC is replacing, they will end when you make a UC claim. If you currently receive tax credits, see below.
  • UC takes into account savings and your partner’s circumstances and income. If their income is too high, you may not qualify for any help.
  • If your partner already receives contribution-based ESA – which was the old name for new-style ESA – you may be able to ask for it to be re-assessed to include an income-based element to top-up your income instead of claiming UC. If you are in this situation, you should seek advice.
  • The Government have announced that a rule called the ‘minimum income floor’ – which sometimes reduced the amount self-employed people could get in UC – has been temporarily suspended.

The benefits system is complicated. If any of the points above apply or you are unsure, you should seek specialist welfare rights advice before making any UC claim.

If you are making a new claim to UC, this might mean you are eligible to open a Help-to-save account, which pays a tax-free government bonus of up to 50% of the amount saved. While saving is unlikely to be your priority at this time, if you open one while you are eligible, you can continue to save into the account for up to four years, even if you no longer claim UC. Our Help to Save press release explains more.

If you/your partner already receive tax credits or benefits

If you are already entitled to working tax credit, you will continue to be treated as in work for up to 28 weeks of your illness/sick leave as long as you would have certain sickness benefits if you were employed. See our detailed guidance for more information.

You should also be aware that if you do claim new-style ESA, it will count as income for tax credit purposes. There is no requirement to report changes to income to HMRC when they happen, but if you do not then you may be overpaid if your income increases or you may miss out on additional credits if your income falls.

As explained above, if you make a claim for UC, your tax credit claim will end.

If you are already in receipt of UC, you should speak to the DWP if you claim new-style ESA. This will be taken into account as income and will reduce your UC pound for pound.

Coronavirus guidance: more information
Information for employers Taking money from your savings
What is the Job Retention Scheme? Taking money from your pension
Employees: illness or self-isolation Help with paying your tax
Employees: work changes Information if you are a student or are repaying your student loan
Employees: universal credit and pay Accessing money in childcare schemes
Redundancy explained High Income Child Benefit Charge: What to do if your income falls?
Support for limited company directors School closures: family members might be able to claim state pension ‘babysitting’ credits
Self-Employment Income Support Scheme Childcare support and benefits for children
SEISS parental extension Inheritance tax exemption
Self-employment and paying tax Support for Carers
Self employment: Illness or self-isolation Carer’s allowance: can you claim?
Self-employment: work changes Volunteering and job opportunities
Help for businesses in Northern Ireland, Scotland and Wales Scams: please be vigilant!
Test and Trace Support payment Dealing with HMRC during the coronavirus outbreak

Tax penalties: coronavirus ‘relaxations’

Coronavirus guidance home page
More information on self-employment
Am I employed, self-employed or neither?

What tax allowances am I entitled to?

How do I register for tax and National Insurance?

What is the trading allowance?

What business records should I keep?

How do I pay tax on self-employed income?

Working out profits, losses and capital allowances

What National Insurance do I pay if I am self-employed?

How do I work out my taxable profits?

What is the Construction Industry Scheme (CIS)?

How do I prepare my accounts?

How do I work out my profits for universal credit?

What business expenses are allowable?

Do I have to pay VAT if I am self-employed?

Can I claim for pre-trade expenses?

What is Making Tax Digital for VAT?

What capital allowances can I claim?

Pensions and self-employment

What if I make a loss?

How do I repay my student loan if I am self-employed?

When do I make Self Assessment payments and file my tax return?

Penalties and enquiries

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