March 27, 2020 @ 9:32 by Richard Dawson
In a development that will greatly reassure many of the UK’s five million self-employed, the Chancellor Rishi Sunak yesterday (March 26) announced that the Government will provide cash grants to those who work for themselves, equivalent to 80 per cent of their previous earnings.
The Coronavirus Self-employed Income Support Scheme will cover those who derive a majority of their income from self-employment up to a threshold of £50,000 and to a maximum of £2500 per month.
The grants will be backdated to March 1 but will not be available until June and HMRC will contact those eligible directly.
HMRC will use tax returns from the last three years to calculate average monthly earnings and will then pay 80 per cent of this figure direct into people’s bank accounts in one instalment.
This means that only those with a tax return for 2019 will be eligible to apply.
The announcement ends growing uncertainty among the nation’s self-employed, whose earnings have been severely impacted by the COVID-19 pandemic.
It also delivers a degree of parity with PAYE workers, for whom a similar scheme was secured last week.
The new income support scheme for sole traders and partners was described by the Chancellor as “one of the most generous schemes anywhere in the world.”
It is thought the 95 per cent of people who are majority self-employed will benefit from the scheme.
Speaking at the Government’s daily press conference, Mr Sunak said: “These last ten days have shaken our country and economy as never before.
“In the last two weeks we have put aside ideology and orthodoxy to mobilise the full power and resources of the British state.
“We have done so in pursuit of a single goal: to protect people’s health and economic security, by supporting public services like our NHS, backing business, and protecting people’s jobs and incomes.
“What we have done will, I believe, stand as one of the most significant economic interventions at any point in the history of the British state, and by any government, anywhere in the world.”
Jonathan Walker, assistant director of policy at the North East England Chamber of Commerce, added: “The Chancellor has heeded the call from scores of self-employed people that make such a vital contribution to our economy for support to get through this crisis.
“We welcome the measures announced today, which should provide some relief and reassurance to those who have seen their livelihoods placed under severe strain in such a short period of time.
“However, we are seeing businesses large and small facing immediate threats to their future. While we accept the enormous complexity involved in all of the measures that have been announced, it is vital that they are implemented as quickly as possible.
“We know any delays will cause unnecessary hardship to many of our region’s businesspeople.”
For more information, visit https://www.businesssupport.gov.uk/