Coronavirus: What Is The UK Government Doing To Help Self-Employed People?

Chancellor Rishi Sunak has just unveiled new measures.

Self-employed women

by Georgia Aspinall |
Updated on

New government help for self-employed workers under financial strain has been set out by chancellor Rishi Sunak. It comes after warnings from self-employed people in the UK that they simply cannot live off the current benefit of £94.25 a week, equivalent to statutory sick pay.

What help is the government giving self-employed people?

In the daily news briefing on BBC One at 5pm, Sunak announced the government's intention to match the 80% salary support given to Pay As You Earn (PAYE) employees. This will be calculated using average monthly profits over last three financial years but will be capped at £2,500 per month.

The new taxable grant will be available for three months and Sunak says will be extended if research shows it needs to be. It's open to people whose businesses have trading profits of up to £50,000 and only those who have a self-assessment tax return from 2019 can apply. More than that, it is only open to those whose self-employed work makes up the majority of their income. He says it will cover 95% of self-employed people and that those in the 5% have an average income of around £200,000.

Those eligible will be contacted by HMRC directly. In the mean time, self-employed people can now access universal credit in full (up to £1800 a month for some). In order to help those who have not yet filed their 2019 tax return, Sunak says the government has extended the deadline for tax returns by four weeks from now (26 March) so as many people as possible can benefit from the scheme.

When will the support for self-employed people be available?

Sunak confirmed that it will be up and running by the start of June, but is aiming to get it done sooner if the government can overcome 'operational difficulties'. The four-week extension on tax returns also means it will be at least a month before support.

However, Sunak confirmed people in desperate circumstances can apply for an advanced universal credit payment and receive it 'almost immediately after the claim' or 'certainly within days' so they do not have to wait for the usual time of five weeks, as people who apply for universal credit normally do.

Why has it taken so long to help self-employed people?

According to reports from government sources, setting up this system is much more complicated for self-employed people given that their incomes are often irregular and some are not on PAYE schemes. Plus, some sources say the government has found it difficult to avoid paying out to people who do not need the help.

‘For many people that have seen their businesses disappear in the blink of an eye, things like statutory sick pay or universal credit just isn't enough,’ Dr Adam Marshall, director general of the British Chambers of Commerce told the BBC’s Today Programme this morning. ‘It doesn't need to be perfect - we just need a system in place.’

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