COVID-19 and the self-employed: What has Rishi Sunak just announced?

The Chancellor Rishi Sunak has just announced a major package of “new support for the self-employed” who are facing financial hardship as the coronavirus crisis grips the nation.

A new “Self-employment Income Support Scheme” was revealed at the 5pm press conference after Prime Minister Boris Johnson and the Government had came up mounting pressure to provide more help.

The Government will cover wages up to a maximum of £2,500 per month for those eligible, in a move Mr Sunak said was “almost like no other country and makes the scheme one of the most generous in the world”.

This will take the form of a taxable grant worth 80% of their average monthly wages from the last three years, based on their tax returns to HMRC.

Mr Sunak did admit, however, the Government won’t be able to save every business.

The scheme is open to people across the UK for three months and could be extended if necessary. It will be available to anyone with trading profits of up to £50,000.

Only those already in self-employment with a tax return for 2018-19 can apply.

The Chancellor said ministers have worked to make sure it is "targeted at those who need it the most".

The 80% pledge means it covers the same amount as the Government has offered to furloughed employees on PAYE.

Mr Sunak said he knows the self-employed had been “deeply anxious” about the support for them during this crisis and acknowledged they felt “through no fault of their own, risk losing their livelihood.”

But he pledged: “We won’t leave you behind.”

The Chancellor said the measures will cover 95% of people who make the majority of their wages through being self-employed.

The self-employed will be able to access the scheme no later than the beginning of June, Mr Sunak said, adding universal credit is available in the interim to provide financial support.

Addressing why it taken time to come up with this support for the self-employed, he said it had been difficult to devise the scheme because of the complexity of self employed arrangements.

To make sure nobody misses out, those who missed the Self-Assessment filing deadline in January this year will be given an additional four weeks to complete their tax return.

The scheme “is fair and deliverable”, with “unprecedented level of support for self-employed people”, he said.

However, there may be a sting in the tail for the future, with the Chancellor implying that he will at some stage reform the tax system so that the self-employed lose some of their tax advantages.

That’s because he said he is treating the self-employed like the employed in this situation, but in return, everyone must pay in.

Here to Help

IRIS is here to help and to bring certainty in these uncertain times. We have a range of guides and other support for you to help you through the current crisis. Visit our Here to Help Hub for full details.