SELF-EMPLOYED workers will be able to claim support worth 80 per cent of their average monthly profits in an ‘unprecedented’ move to cover the impact of coronavirus, Rishi Sunak has announced.
The Chancellor (pictured) said the move — worth up to a maximum of £2,500 a month — would cover 95 per cent 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 told a press conference this evening: ‘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 per cent 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.
‘And 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 per cent 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.
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.’
Whether today’s measures for the self-employed go far enough remains to be seen, but for many freelancers what they wanted more than anything else was the acknowledgement ‘that we have lost our incomes too’.
Casting director Sally McCleery, 39, and her personal trainer partner Iain Jackson, 40, are both facing a shortfall as a result of the Covid-19 crisis.
Ms McCleery said: ‘Auditioning was the first thing to stop a couple of weeks ago, and although we can revert to self-tapes normally, but we are currently on hold on all projects because without shoot dates we cannot confirm actors’ availabilities and there is no point in taping them.
‘I am freelance so my income stopped just like that once my main production had decided to postpone.’
Mr Jackson has also seen a drop in income as clients began to pull out of sessions and the gym he worked in closed down due to the government’s social distancing rules.
‘He has a couple of people who are willing to train online with him but his income is very limited,’ Ms McCleery said.
As a result, both are hoping for ‘some sort of income support’ from the government.
‘We don’t need for it to be as much as we normally earn as we are able to live quite cheaply, but something to acknowledge that we have lost our incomes too.’
Harriet Morter, 30, a TV producer-director from London, has had to ask her bank for a mortgage holiday on her brand new home after four potential jobs disappeared due to the coronavirus.
She claimed she has been on hold on the phone for four days and a combined 25 hours trying in vain to claim universal credit.
She said: ‘Although I’m grateful for any support, I hope that the government realises that we all pay taxes and the HMRC have a record of what we pay each tax year.
‘It was only a few months ago that I was paying over £1,000 for one room in a London houseshare, and I worry for my freelance friends in rentals.
‘As it stands, the government has offered us £94 per week on universal credit. Most of us have no choice but to rent in places where the TV industry is most prominent, such as Bristol and London. How will [my freelance friends] pay extortionate rental payments on less than £400 per month?’
Oli, 31, a construction worker from London, said: ‘Some higher-end residential buildings stopped any non-essential work about a week before the actual lockdown began, so work had to be brought forward for those times.
‘Lots of future work has either been cancelled or postponed until further notice. In my group of people who I have worked with, we are all in a similar situation.
‘In the short term, finances are stretched at the moment as there is only one person’s salary coming in. However, as nursery fees are not required [or] buying lunches/meals out whilst at work, things are helping to save a bit of money.
‘In the long-term, I think things are going to be tight and probably further cutbacks will be required, at least until the country starts to recover, which means demand for my work again.’
Oli said he was hoping for ‘at least something similar to those that are employed’.
He said: ‘The government is having a mad scramble now to try and make up something for the self-employed, no matter the industry. It shows that they have never planned out these scenarios or had contingency plans for these events.’
Devina (not her real name), 32, a freelance marketing consultant from London, said: ‘Universal credit is in no way comparable to the permanent workforce’s offer of up to 80 per cent of their wages.
‘The contracting workforce has a purpose and place in our economy, and whilst companies are understandably under a lot of strain and pressure just now, the government should step in to support the contractor workforce too, to the same effect.
‘If the rumours of [self-employed workers receiving] up to 80 per cent of our wages averaged over the last three years are true, I’d be chuffed, as I’m sure many others would too.’