News

Thought leadership

Self-employed workers can apply for a grant worth 80% of their average monthly profits to help them cope with the financial impact of coronavirus, the chancellor has announced.

The money – up to a maximum of £2,500 a month – will be paid in a single lump sum, but will not begin to arrive until the start of June at the earliest. Rishi Sunak told the self-employed: “You have not been forgotten.”

Mr Sunak said the steps taken so far were “already making a difference” but it was right to go further “in the economic fight against the coronavirus”.

  • Self-employed people will be able to apply for a grant worth 80% of their average monthly profits over the last three years, up to £2,500 a month.
  • At least half their income needs to have come from self-employment as registered on the 2018-19 tax return filed in January – anyone who missed the filing deadline has four weeks from now to get it done and still qualify.
  • The scheme is open to those who earn under £50,000 a year – up to 3.8 million of the 5 million people registered as self-employed.
  • Unlike the employee scheme, the self-employed can continue to work as they receive support.
  • The money, backdated to March, will arrive directly into people’s banks accounts from HMRC, but not until June.
  • The grants will be taxable, and will need to be declared on tax returns by January 2022.
  • Company owners who pay themselves a dividend are not covered.

 

The scheme does not cover people who only became self-employed very recently – the chancellor said they would have to look to the benefits system for support.

Coming up with a workable scheme had been “difficult”, he continued, because the self-employed were a “diverse population” and some of them earned a great deal.

But in all, the “fair, targeted and deliverable” plan would help 95% of people who earn most of their income via self-employment.

“We have not left you behind, we all stand together,” he added.

Communities Secretary Robert Jenrick later told the BBC’s Question Time that even where self-employed workers were unable to provide full financial records going back three years, the government was urging people to “give us what they’ve got and we will work through it with HMRC to see if there’s a way to support you”.

The Federation of Small Business, which represents many self-employed workers, welcomed the intervention, saying: “Although the deal is not perfect, the government has moved a very long way today.”

But Labour’s shadow chancellor John McDonnell said he was worried the money would come “too late for millions”.

“People need support in the coming days and fortnight… there is a real risk that without support until June the self-employed will feel they have to keep working, putting their own and others’ health at risk.”

Labour leader, Jeremy Corbyn, said the government had been too slow to recognise the severity of the crisis.

Torsten Bell, from think tank the Resolution Foundation, said the very significant package stood in “stark contrast” to the “much less generous” support being given to employees who lose their jobs or see their hours cut during the crisis.

You may also like...

Keep Up To Date - Subscribe To Our Email Newsletter Today

Get the latest industry news direct to your inbox on all your devices.

We may use your information to send you details about goods and services which we feel may be of interest to you. We will process your data in accordance with our Privacy Policy as displayed on our parent website https://ebm.media