Coronavirus: What help will self-employed get from government?

Darnell Taylor
March 31, 2020

Chancellor Rishi Sunak said the scheme will be open for at least three months and will cover 80 per cent of a self-employed person's average monthly profits.

The chancellor had come below strain to do extra to handle the employees who are usually not on the Pay As You Go (PAYE) as payroll firm workers after he had introduced a bundle to cowl 80 per cent of the wages of PAYE employees.

The Resolution Foundation said the government should widen wage subsidies to self-employed workers and those who have already lost their jobs, rather than limiting the programme to people put on temporary leave by their employers.

Self-employed workers have called on Rishi Sunak to explain how they will pay their bills for the next three months, while senior MPs and union leaders are urging him to make the aid available much earlier. "We will not let you behind".

"To make sure only the genuinely self-employed benefit, it will be available to people who make the majority of their income from self-employment".

He added that he was aware many self-employed people have been "deeply anxious" in recent weeks.

And, to keep away from fraud, it can exclusively be open to people who find themselves already self-employed and have a tax return from 2019, which might imply that 95 per cent of the self-employed might be coated. Today's self-employed package offers in principle the same protection, offering self-employed workers whose trading profits are below £50k/year 80% of their average monthly profits, up to £2.5k per month for up to 3-months - although this may be extended - as with the CRJS. "I am hoping and expecting these people are included when the detail of the Job Retention Scheme is announced".

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Sunak's announcement follows days of pressure on the government to provide help to the self-employed - everyone from consultants and lawyer to musicians and Uber drivers.

He added: "Asking people to rely on universal credit when more than 130,000 are queuing online will be worrying to many people".

Richard Harris - chief legal officer at global recruitment consultancy Robert Walters, said: "The Chancellor's announcement offers a package of support for vast swaths of the self-employed and freelancer community".

The Institute for Fiscal Studies (IFS) said nearly a million self-employed workers were in sectors now experiencing huge falls in demand, and those working for themselves were already much more likely to be living in poverty than employees. However, whereas the cost of the CRJS depend on the imponderable of how many workers could be furloughed in this manner, today's self-employment scheme seems more likely to be tapped by the majority of the 5.033m self-employed now estimated in the country.

That means many will use up much of that buffer before the first grant arrives.

There is "really nothing" the government can do for those who entered into self-employment in the past year, Sunak said, directing them to the welfare system.

"This is a time of national emergency, and it is very welcome that the government has listened to FSB and responded with a multibillion-pound package to support the most financially vulnerable entrepreneurs, and to do so through the self-assessment system".

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