Chancellor reveals a Self-employed Scheme

Marco Green
March 27, 2020

Under the scheme the self-employed will receive a taxable grant of up to 80 per cent of their average monthly profits over the last three years up to £2,500 per month.

Speaking at a press conference this afternoon, Rishi Sunak said: "To support those who work for themselves, today I am announcing a new self-employed income support scheme".

The scheme will also only be available to those who make the majority of their income through self-employment, and who have a 2019 tax return proving their self-employed status.

The first payment from June will be worth three months' pay and will require an online application to HMRC before it is paid into a bank account.

More than half of a claimant's income needs to come from self-employment. The scheme does not cover those who have been self-employed for less than a year.

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.

These include a strengthening of the welfare safety-net with a £7 billion boost to Universal Credit, income tax and VAT deferrals, £1 billion more support for renters and access to three-month mortgage holidays.

Explaining the delay in the House of Commons on Tuesday, Sunak said there were "practical reasons" why it was "incredibly complicated" to create an equivalent package for the self-employed.

Self-employed workers are not paid through PAYE and they don't have the same obligations as a company director.

How many people are affected?

Roughly a fifth are in the construction sector, according to the Office for National Statistics (ONS), with hundreds of thousands of others working in the motor trade, professional services, and education.

She also said: "With so numerous self-employed facing a collapse in their earnings the Chancellor is right to act". This signals a massive change in United Kingdom tax policy, potentially equalising the tax treatment of the self-employed.

How does the new help compare with salaried workers?

The only concessions that the self-employed were given were access to an amount equalling that of payroll employees' statutory sick pay, as well as a tax deferment.

In the latest step to protect individuals and businesses, Rishi Sunak has set out plans that will see the self-employed receive up to £2,500 per month in grants for at least 3 months. The idea is to prevent mass unemployment.

Other reports by Click Lancashire

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