Business

Coronavirus: Self-employed offered support worth 80% of average monthly profits

Chancellor Rishi Sunak leaves 11 Downing Street, London, the day after Prime Minister Boris Johnson put the UK in lockdown to help curb the spread of the coronavirus.
PA Reporters

Self-employed workers will be able to claim support worth 80% of their average monthly profits in an “unprecedented” move to cover the impact of coronavirus, Rishi Sunak has announced.

The Chancellor said the move – worth up to a maximum of £2,500 a month – would cover 95% of self-employed workers.

The package comes after the Government came under sustained pressure as its initial package of financial support only covered employees.

Mr Sunak said: “To support those who work for themselves, today I am announcing a new self-employed income support scheme.

“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.”

Mr Sunak said the scheme will be available “no later” than the beginning of June.

He said that it is open to anyone with trading profits of up to £50,000 and will be only available to those who make the majority of their income from self-employment so only the “genuinely self-employed” benefit.

“To minimise fraud, only those who are already in self-employment who have a tax return for 2019 will be able to apply,” he said.

“95% of people who are majority self-employed will benefit from this scheme.

“HMRC are working on this urgently and expect people to be able to access this scheme no later from the beginning of June.”

Mr Sunak said those eligible will be contacted by HMRC and the money will be paid into their bank accounts.

And he said anyone who missed January’s filing deadline will have four weeks to submit their tax return so no-one misses out on support.

For people who are struggling right now, self-employed people can access business interruption loans, and self-assessment income tax payments can be deferred until the end of January, Mr Sunak said.

He added that self-employed people can now access Universal Credit in full.

SNP MP Amy Callaghan tweeted: “Waiting until June for self-employed people to get support is unfathomable. My constituents are struggling now. Simply not good enough.”

The Chancellor said: “This scheme will be open to people across the UK for at least three months.

“And, I will extend it for longer if necessary. You will be able to claim these grants and continue to do business.”

He added: “To make sure that the scheme provides targeted support for those most in need it will open to anyone with trading profits of up to £50,000.”

Mr Sunak suggested self-employed workers could have to accept changes to their tax breaks as a result of receiving state support to help them through the coronavirus outbreak.

“I must be honest and point out that in devising this scheme in response to many calls for support, it is now much harder to justify the inconsistent contributions between people of different employment statuses,” said the Chancellor.

“If we all want to benefit equally from state support, we must all pay in equally in future.”

Taking a question on the scheme to help the self-employed, Mr Sunak said the average earnings of those not covered by the state aid were those earning more than £200,000 per year.

“Of the people it does not cover, those last 5%, those above the income threshold we set, their average incomes are about £200,000,” said the Chancellor.

“We think what we have done is reasonable, proportionate and fair, and, like I said, covers 95% of all self-employed people who make the majority of their earnings from self-employment.

“I think it is a very generous scheme in that regard and treats them with the same parity as the employed.”

In other developments:

– Criminals who deliberately cough at police officers while claiming to have coronavirus could face up to two years in jail, the country’s top prosecutor has warned.

– The Home Office warned that people who continue to flout coronavirus lockdown rules will be breaking the law and could be arrested by police.

– The Prince of Wales, who is self-isolating in Scotland after testing positive for coronavirus, thanked the public for the hundreds of get well messages he has received.

– Home tests for people to find out whether they have had coronavirus could be available in a matter of weeks, says Public Health England. Professor Yvonne Doyle, medical director for the organisation, said plans were in place for “a million tests that people can do themselves”.

– Billionaire entrepreneur Sir James Dyson said the Government had ordered 10,000 ventilators from his company.

– The Bank of England left interest rates unchanged at 0.1% after last week’s emergency action to shore up the economy.

– Downing Street said the UK had become the largest contributor to the international coalition to find a coronavirus vaccine after donating £210 million in new aid funding

– No10 indicated that additional coronavirus field hospitals are being considered around the UK. The Prime Minister’s official spokesman said 500 of the additional 4,000 beds created in the NHS Nightingale Hospital being set up in London’s ExCeL centre will be available for use next week.

– The Government raised the target for volunteers to help vulnerable people through the coronavirus crisis to 750,000 after more than half a million people responded to the call. NHS England chief executive Simon Stevens said almost 650,000 members of the public have signed up to volunteer for the NHS in a “most extraordinary” response.

Boris Johnson has previously warned that the self-employed may not be able to get through the coronavirus crisis “without any kind of hardship at all”.

But the Prime Minister said he wanted to get “parity of support” so the self-employed could have similar levels of protection to waged workers.

Mr Sunak set out plans for 80% wage subsidies for PAYE employees last week.

Meanwhile, a national salute will take place on Thursday evening to honour the hardworking NHS staff who are trying to battle coronavirus.

In a gesture of thanks to the frontline healthcare heroes, everyone across the nation has been invited to join a a mass round of applause from their doorsteps, windows and balconies at 8pm.

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