What do you do if you need sick pay as a self-employed tradesperson?

Running your own business comes with lots of benefits. But it also has its challenges. If you become ill, you might be incapable of working for a day, a week or even several months. In this situation, it’s essential to have a plan in place.

Sick pay for self-employed tradespeople

If you are an employee of a business then you can claim statutory sick pay (SSP) from your employer. Unfortunately, self-employed sole traders and partners can’t claim SSP.

There are, however, other funding options for business owners who fall into these categories.

As a sole trader or partner, you may be able to claim one or more of the following allowances:

• Universal Credit
• New Style Employment and Support Allowance
• Employment Allowance (reductions in National Insurance)
• Employment and Support Allowance (ESA)

Employment and Support Allowance (ESA)

ESA is the most common form of income support for business owners who are unable to work and are registered sole traders or partners.

If you are under State Pension age (currently 66 but gradually climbing to 68) and you have an illness or disability that prevents you from working, then you should be eligible for ESA. You will also need to have worked or been self-employed and paid enough National Insurance contributions over the last two to three years.

When you make a claim for ESA, your application will be assessed by the Department for Work and Pensions. During the assessment period, you’ll receive payments for 13 weeks of up to £59.20 per week for under 25s and up to £74.70 per week for people 25 and over.

Following assessment, if your application is successful, you’ll receive either up to £74.70 per week if you’re able to go back to work or up to £114.10 per week if you’re incapable of returning to work.

New Style Employment and Support Allowance

The government has another scheme that could help self-employed tradespeople who fall ill. It’s called New Style Employment and Support Allowance.

You might be able to claim this support along with – or instead of – Universal Credit (see below). This will depend on your record of National Insurance payments.

The New Style ESA could also be available if health issues or a disability limit your ability to work. More information about how to make a claim is available from the Citizens Advice.

Universal Credit

This is a monthly payment that helps people with their living costs. If you need to acquire self-employed sick pay, UC may be able to assist.

SSP for company directors

If you’re a company director, you are legally an employee of your business. Employees are entitled to statutory sick pay if they meet the SSP qualifying days requirement.

As a company director, you have the same sick pay entitlement as other employees. You must meet the following criteria to be eligible for SSP:

• Have an employment contract
• Have carried out work under this contract
• Have been sick for more than four consecutive days (including non-working days)
• Earn an average of at least £123 per week
• Provide notice and proof of illness when required

How a director is paid will vary from company to company. More detailed information is available on the government website.

SSP qualifying days

SSP qualifying days are the days that you’re off sick but should otherwise have been working.

You qualify for SSP from the fourth day that you’re off sick, so you’ll be paid for all the working days that you’re off sick, except the first three days of your illness.

In some instances, you can be paid SSP for the first three working days that you’re off sick. For example, if you have already received SSP for a period of sickness within the last eight weeks and it included the three-day waiting period.

The current SSP pay rate in the UK is set at £109.40 a week for a maximum of up to 28 weeks.

When calculating statutory sick pay, you need to divide the weekly SSP rate (£109.40) by the number of days you (or your employee) usually works per week (eg five). You then multiply that figure by the number of qualifying days of sick leave.

Sick pay insurance for business owners

Sole traders and self-employed business owners may wish to plan ahead. Sickness can have a detrimental effect on your business performance. But sick pay insurance could help to cover your costs during difficult periods.

There are lots of companies that offer sick pay insurance. Terms and conditions vary from company to company. In general, however, sick pay insurance will usually include:

• Payment of monthly premiums
• Professional claims management support
• Independent validation
• Professional assessment and support

If you’re a business owner and you need to take time off sick, it’s important to keep your business running as best you can. This will involve some contact with your employees.

The benefits of Checkatrade membership when off sick

Checkatrade membership can greatly increase your work opportunities during difficult times. As a Checkatrade member, you’ll continue to receive leads regardless of whether you’re on sick leave. This can help your company to continue to perform in your absence.

Fixed membership from Checkatrade means you can expect a certain number of leads throughout the year. So even during a time of absence, you can rely on a trusted lead source to keep work coming your way.

FAQs

Is there sick pay for self-employed tradespeople?

If you’re self-employed, you can’t claim Statutory Sick Pay (SSP). You may, however, be entitled to other sick benefits including Employment and Support Allowance (ESA).

Can company directors get sick pay?

Yes. Company directors are classed as employees of their own company and are therefore entitled to claim SSP. However, remember that your own company will need to cover the cost of paying this to you. To qualify for SSP as a Company Director, you must meet the average weekly Lower Earnings Limit (LEL).

How long can you be on sick leave?

SSP can be paid for a maximum of 28 weeks. After this time, it is at the company’s discretion as to whether to terminate the contract of employment.

What are the sick note rules when self-employed?

If you’re self-employed and you want to apply for Employment and Support Allowance (ESA) due to being unable to work for more than seven days in a row, you’ll need to obtain a fit note (sometimes called a ‘sick note’ or a ‘statement of fitness for work’). You can get one from a GP or hospital doctor, registered nurse, occupational therapist, pharmacist or physiotherapist. They’ll need to assess your fitness for work before giving you a fit note.

Is there a self-employed statutory sick pay form?

No. As SSP is only open to employees, you are not eligible for this if you are a sole trader or self-employed. If you are a company director of your own business, you may be eligible if you meet the requirements.