Freelancers and the self-employed will receive financial support during the coronavirus outbreak, the chancellor has announced.
Rishi Sunak confirmed on Thursday (26 March) that the government will support these workers by providing a taxable grant of up to 80% of their monthly net earnings, averaged over the last three years, up to £2,500 a month.
It will be available across the UK for at least the next three months and will bring self-employed workers on a par with employees furloughed under the Job Retention Scheme.
- Trading profits of up to £50,000
- Make majority of their income from self-employment
- Already in self-employment with a tax return for 2019
The HMRC is working on implementing this urgently, the chancellor said, and workers will be able to access it no later than the beginning of June.
Applications can be made online and the money will be paid directly into bank accounts. Anyone who missed the tax return January deadline has an additional four weeks to do so.
Mr Sunak reiterated that workers can receive support immediately through the Business Interruption Loan Scheme or benefits access being eased, and that the income tax self-assessment has been deferred by six months.
“You have not been forgotten,” said Mr Sunak. “We all stand together.”
There are five million self-employed people in the UK, generating about £300bn for the economy.
However, it has been more complicated for the government to create a system that provides a sufficient level of support to every self-employed worker.
According to the government this is because it is not straightforward to identify who is and who isn’t self-employed; defining a regular pay packet is difficult and therefore it is hard to underwrite accurately; HMRC does not hold details for all self-employed people; and the Treasury has claimed that some self-employed people may be unaffected by the current situation.
In addition, it was previously announced that income tax self-assessment payments due on 31 July 2020 will be deferred to 31 January 2021. Anyone classed as self-employed will be eligible and no application is required.