The UK Government will pay self-employed workers 80% of their profits, up to £2,500 a month, to help them cope with the coronavirus crisis.
The financial support will be in the form of a taxable grant, worth 80% of a self-employed worker’s average monthly profits over the last three years.
The scheme is open to anyone with “trading profits of up to £50,000”, but will only be available to those who make the majority of their income from self-employment. The monthly amount will be capped at £2,500.
The scheme is expected to be available “no later” than the beginning of June.
Chancellor Rishi Sunak told a press conference on Thursday that this “provides an unprecedented level of support for self-employed people.”
He said: “The Government will pay self-employed people who have been adversely affected by the coronavirus a taxable grant worth 80% of their average monthly profits over the last three years, up to £2,500 a month.”
“To minimise fraud, only those who are already in self-employment who have a tax return for 2019 will be able to apply.
“95% of people who are majority self-employed will benefit from this.
“HMRC are working on this urgently and expect people to be able to access this scheme no later from the beginning of June.”
1/ I’m proud of what we’ve done so far, but I know that many self-employed people are deeply anxious about the support available for them.
So to support those who work for themselves, today I am announcing a new Self-Employed Income Support Scheme. pic.twitter.com/wJQZzNFOCH
— Rishi Sunak (@RishiSunak) March 26, 2020
The Chancellor said those who are eligible for the grant will be contacted by HMRC, and the money will be paid directly into their accounts.
Anyone who missed the filing deadline in January will have four weeks to submit their tax return so no-one misses out on the scheme.
He said those that will struggle to wait until June can access business interruption loans, and Universal Credit in full. Self-assessment income tax payments can also be deferred until the end of January.
Mr Sunak said the scheme will be open across the UK for at least three months, and will be extended “if necessary”.
While some said the move by the Chancellor was “welcome”, many opposition MPs were quick to blast the announcement.
Labour MP David Lammy tweeted: “Leaving 5 million self-employed Brits without any support until June is a slap in the face. Many will be bankrupt by then.”
Leaving the 5 million self-employed Brits without any support until June is a slap in the face. Many will be bankrupt by then. And why is there an eligibility cap for the self-employed but not the employed? This is not what I call fair.
— David Lammy (@DavidLammy) March 26, 2020
SNP MP Amy Callaghan said: “Waiting until June for self-employed people to get support is unfathomable. My constituents are struggling now. Simply not good enough.”