Self-employed workers adversely affected by COVID-19, will be able to apply for a taxable grant of up to £2,500 a month to help them cope with the financial impact of coronavirus, the chancellor has announced on 26 March.
The money will be drawn for a new Self Employed Income Support Scheme and will be paid in a single lump sum, but will not begin to arrive until the start of June at the earliest.
The Chancellor stated that self-employed people facing financial difficulties will be able to have 80% of their monthly wages covered by the government.
The 80% of monthly wages calculation will be based on using average monthly profits over last three financial years.
The support will be capped at £2,500 per month, and will initially last three months though there is the possibility of an extension.
This latest financial support follows the Government Plans for 80% wage subsidies for staff kept on by employers in the Job Retention Scheme announced last week. Both schemes cover the same amount of income for a self-employed person as for furloughed employees.
In his announcement the Chancellor stated the Government has followed advice to be “controlled” in their actions, ensuring the right measures arrive at the right time whilst also acknowledging that people are worrying about their jobs and incomes.
The Chancellor stated that working with unions and businesses, the Government had come up with a “coherent, coordinated and comprehensive” economic plan, which was “already” starting to make a difference.
He has urged businesses to look “very carefully” at what support is available before deciding to lay people off.
The Chancellor added, that the Self Employed Income Support Scheme is “unlike any other country”, making it one of the most “generous” in the world and that providing such “unprecedented” support had been “difficult” to do in practice, because the self-employed earn such varying amounts.
Steps taken to ensure the scheme is deliverable and fair include:
- The scheme is only open to anyone of trading profits of up to £50,000.
- It is also only open to those who gain the majority of their income from self-employment.
- To minimize fraud, only those who are already in self-employment, who have a tax return for 2019 can apply.
- 95% of people who are majority self-employed will benefit
- HMRC are working on this urgently, to make the scheme available by early June.
HMRC will contact those eligible directly, who will have to fill in a simple form online and the grant will be transferred directly.
Anyone who missed the filing deadline in January will be given 4 weeks from today to fill in their tax return.
For those who need support now, self-employed people can access the Business Interruption Loan Scheme, self-assessment income tax payments due in July can be deferred to January 2021, and self-employed people can now access Universal Credit.
The Chancellor concluded, that what the Government has done will stand as one of the “most significant economic interventions at any point the history of the British state and by any government, anywhere in the world”. Adding, “Despite these extraordinary steps, there will be challenges ahead, but these measures will help millions of people get through the crisis together, and emerge stronger and more united.”
The GGF welcomes this news of more Government support and encourages all those who are self- employed to apply to this scheme.
The GGF also encourages all Member companies who contract self-employed workers to cascade this information to them to ensure they apply to this scheme to help them during these difficult times.
The GGF will post more information and news as and when it happens to help Members cope during this crisis.
Follow the Government guidelines to avoid the spread of this deadly virus and stay safe and well.