Support package announced for self-employed

Support has been pledged for the self-employed who can no longer work due to the coronavirus pandemic.

Announced by Chancellor Rishi Sunak on Thursday (26 March), the government has said it will introduce a self-employed income support scheme for at least three months.

The government will pay self-employed people who have been adversely affected by the coronavirus a taxable grant worth 80% of their average monthly profits over the last three years, up to £2,500 a month.

Cleaners, plumbers, electricians, musicians, hairdressers and many other self-employed people who are eligible for the new scheme will be able to apply directly to HMRC for the taxable grant, using a simple online form, with the cash being paid directly into people’s bank account.

Mr Sunak said: “I know many self-employed people are anxious about what support is there for them.

“You have not been forgotten. We will not leave you behind.”

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.

To qualify, more than half of their income in these periods must come from self-employment.

To minimise fraud, only those who are already in self-employment and meet the above conditions will be eligible to apply. HMRC will identify eligible taxpayers and contact them directly with guidance on how to apply.

The income support scheme, which is being designed by HMRC from scratch, will cover the three months to May. Grants will be paid in a single lump sum instalment covering all 3 months, and will start to be paid at the beginning of June.

Mr Sunak added that “95% of those who are majority self-employed” will benefit from the scheme.

The scheme is expected to be accessible “no later than the beginning of June”.

Additionally, the government has granted a four-week extension from today to those who missed the January tax return deadline.

Self-employed people can also access the business interruption loans, defer income tax payments and access Universal Credit in full.

Following the Chancellor's press conference, Hilary Centeleghe, Growth and Startup Lead at the Growth Company, said: “The Coronavirus outbreak has already had a major and unprecedented impact on business in Greater Manchester and the whole of the UK, as well as international business networks.

“While around 104,000 Greater Manchester businesses and their employees were bolstered by the Job Retention Scheme announced by Government last week, more than 180,000 self-employed people across the region have been waiting patiently for a similar package of financial support.

“The launch of the Self Employed Income Support Scheme will hopefully offer reassurance to self-employed people and ‘gig economy’ workers across the region, helping them find more stable footing in the short term, while keeping their growth ambitions on track for the future.

“Self-employed people who have been trading less than a year and are not eligible for the scheme, should remember that they can still receive financial support through the expansion of Universal Credit.

“This new support scheme will involve careful calculations to ensure fairness is delivered across the board. The Growth Company is currently working on detailed guidance to help Greater Manchester’s self-employed community understand what they will need to do to access this vital funding.

“Our new GM EnterprisingYou programme, which is specifically aimed at financially-vulnerable self-employed people, will be instrumental in delivering support and guidance to all Greater Manchester residents who fall under this category.”