Most of Britain’s five million self-employed people will get 80% of their usual income up to £2,500-a-month, but payments will be taxable, linked to profits and not paid out until June.
Chancellor Rishi Sunak announced the much-trailed support package for the self-employed at today’s government Daily Briefing (Thursday, March 26). Commentators deemed the scheme “generous” – though there was much detail to be noted.
Here are five take outs from his presentation.
1.Self-employed to receive 80 per cent of their average profits
The Chancellor unveiled a taxable grant for an initial three-month period, covering 80 per cent of a self-employed person’s profits up to a cap of £2,500 per month.
Called the Coronavirus Self-Employment Income Support Scheme, the grant is open to anyone who…
- has trading profits of up to £50,000
- whose majority income is from self-employed work
- who traded in the last financial year and filed a tax return for 2019.
Anyone who missed the filing deadline last January will be given four additional weeks from today to file.
The self-employed have also been granted a six-month reprieve on filing tax returns, from July this year to January 2021.
2. Funding by start of June
HMRC will contact the self-employed on its database – on a ‘don’t call us, we’ll call you’ basis – paying a lump sum in June, backdated to March.
In the meantime, the Chancellor said people can access Universal Credit and that the DWP (Department for Works and Pensions) would make advance payment “within days”, rather than the previous five-week wait.
3. NI contributions: discrepancy between self-employed and employed ‘noted’
Setting up support for the self-employed had been complicated due to the “inconsistency in contributions” in National Insurance paid by self-employed and employees, the Chancellor said.
Now wasn’t the time to redress this, he said – lower NI acknowledges a lack of sick and holiday pay for the self-employed – but was an “observation” nonetheless.
4. High-street favourites protecting jobs through schemes
The Chancellor revealed that brands such as BrewDog (which exports its craft beers to 60+ countries), Timpsons and Pret a Manger are already using the government’s job retentions scheme to protect thousands of jobs.
5. 80 per cent of businesses and employees now covered
The Chancellor was pressed on medium-sized companies caught between not accessing the Bank of England loans for corporates due to not having an investment-grade rating and being too big to use the Business Interruption Loan Scheme.
He said work is being done to address gaps in the system, but 80 per cent of businesses and employees are already catered for by the schemes announced so far.