In Thursday’s daily press conference the chancellor offered a lifeline to the self employed with a package of measures to help them during the crisis.
The £9 billion package of support will see the Government give millions of self-employed a grant worth up to £2,500 a month.
Chancellor Rishi Sunak said the scheme will be open for at least three months and will cover 80 per cent of a self-employed person’s average monthly profits.
The scheme will be open to those with a trading profit of less than £50,000 in 2018-19 or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19.
Up to 3.8 million people will qualify for support, with average monthly payments expected to be £940 per person.
However, there was a warning it may not be available until June and will only be available to those who have a tax return for 2019 – this means the newly self-employed will be ineligible.
Here’s what he offered as part of a further huge bail-out for UK workers.
So, what did the chancellor offer the self employed?
As long as they could present three years’ worth of accounts the chancellor said his support package for self-employed people would match that of permanent staff by covering 80 per cent of average earnings over the past three years. For those that don’t have three years’ accounts the chancellor said they would look at it on a case-by-case basis. If you have no accounts, we’re afraid there is no help.
And why did the government have to step in to help the self-employed?
Well, many of the country’s millions are self-employed people and were left devastated when their work dried up in the wake of coronavirus. The number of those affected was noted by Rishi Sunak as he made the announcement. The longer the lockdown goes on, and the longer self-employed people are left at home rather than working, the more it will cost the Government.
So how many people are covered by the packages?
Sunak said the scheme covered 95 per cent of self-employed people for whom the majority of their earnings come this way. He said the remaining 5 per cent had average annual earnings of more than £200,000 per year, so would not be covered by the scheme.
What about Universal Credit – he mentioned that too?
The Department for Work and Pensions (DWP) has been inundated with half a million new applications for the welfare this week, which replaced benefits such as income support and job seeker’s allowance.
Is there an advance credit to tide over the self employed?
Absolutely. The Chancellor said that extra resources were being put into local authorities to help those who are most vulnerable to pay for bills. Sunak said those in need would be able to get an advanced payment “almost immediately”.
What about those without a full three years’ accounts?
Sunak said the Government would “look at whatever they do have” in that case. However, he said it would be difficult to provide that support where people had been in self-employment for less than a year, citing how the scheme would be more susceptible to fraud.
It’s not all good news, though.
Sunak warned that the self-employed could face tax hikes in the future too as part of the effort to ‘right the ship’ and repair the battered public finances after the coronavirus crisis is over.
Content source: PA Media, editing on this site James Baggott