The coronavirus outbreak is the biggest public health emergency in a generation. The Government said it would do whatever it takes to protect people’s jobs and incomes – and that is why the Chancellor of the Exchequer, Rishi Sunak, has announced a new Self-Employed Income Support Scheme.
Through this scheme, the Government will pay self-employed people a grant worth 80 per cent of their average monthly profits over the last three years, up to a cap of £2,500 a month – making the UK scheme one of the most generous in the world.
This government scheme is fair, targeted at those who need it the most, and is deliverable:
- The Government will pay self-employed people across the whole UK who have been adversely affected by coronavirus a grant worth 80 per cent of their average monthly profits over the last three years, up to £2,500 a month, for three months – but will extend it for longer if necessary.
- Self-employed people who are eligible will be contacted by HMRC directly, asked to fill out a simple online form, and HMRC will pay the grant directly into their bank account. People can expect to be able to access the scheme by the beginning of June.
- The scheme is open to those with trading profits up to £50,000, meaning 95 per cent of self-employed people are eligible for the scheme. HMRC will also ask people to demonstrate that the majority of their income comes from self-employment, and, to minimise fraud, only those who are already in self-employment, and who have a tax return for 2019, will be able to apply.
- Self-employed people who are struggling right now and cannot wait two months will be able to access loans through the Coronavirus Business Interruption Loans Scheme. This scheme provides loans of up to £5 million, which will be entirely interest free for twelve months.
- For those who need to do so, it will be quicker and easier to access benefits. Those on contributory Employment Support Allowance (ESA) will be able to claim from day 1, instead of day 8. The requirement for anyone to physically attend a jobcentre is also relaxed – everything can now be done by phone or online.
- The minimum income floor normally in place before benefits can be received has been suspended for 12 months – meaning self-employed people can now access, in full, Universal Credit at a rate that is equivalent to Statutory Sick Pay for employees.
- Income tax self-assessment payments for July will be deferred for six months until the end of January 2021.
As you will be aware, the Government is taking further action to protect the economy and save lives during this pandemic.
The Government has pledged that whatever resources the NHS needs, it will get – starting with an initial £5 billion fund so the NHS can treat Coronavirus patients.
Action to Support Families
- The government has lifted the incomes of over four million households on benefits with a £7 billion boost to the welfare system.
- For those who may struggle to meet their mortgage bills the government has introduced three-month mortgage holidays for those in difficulty.
- The government has given £1 billion more support for people who rent by increasing the generosity of housing benefit and Universal Credit, and placed a 3-month moratorium on evictions.
- The government have also made Statutory Sick Pay available for people diagnosed with COVID-19 or who are self-isolating.
Action to Support Businesses
- The Government will pay 80 per cent of the wages of furloughed workers for three months to any employer in the country who promises to retain their staff. The cost of these wages will be backdated to 1st March – meaning some who have already been laid off because of Covid-19 will be eligible.
- The Government has deferred more than £30 billion of tax payments until the end of the year. No business will pay any VAT from now until the end of June, and they will have until the end of the financial year to repay those bills.
- The Government has made available £330 billion of loans and guarantees – that is equivalent to 15% of our country’s GDP.
- The Government has Abolished business rates altogether this year for all retail, hospitality and leisure businesses. All businesses in these sectors are now exempt from business rates for 12 months – that means every single shop, pub, theatre, music venue, restaurant, and any other business in the retail, hospitality or leisure sectors.
- The Government has introduced cash grants of up to £25,000 for small business properties in the retail, hospitality and leisure sectors. Any such small business with a rateable value of less than £51,000 can now get access to a government grant.
- The Government is covering the cost of statutory sick pay for small business for employees who have claimed SSP as a result of Covid-19.
The above extraordinary measures are unprecedented and amongst the most generous anywhere in the world- they are the result of intense work over the past weeks by Government officials, Civil Servants, Ministers working with Trade Unions and the Federation of Small Businesses.
Providing such unprecedented support for so many people is operationally very challenging. The self-employed for example are a very diverse population. They have a wide mix of different levels of income, which even in normal times can vary hugely from month to month. It is also the case that some self-employed people will continue to perform very successfully despite the crisis, and some in the past have also made very large profits. These factors mean it has been very difficult to create an emergency system that will be fair and also deliverable.
I wholeheartedly sympathise with those concerned by the fact that some of the support pertaining to the self-employed is not available for about two months until June. However, the fact of the matter is that HMRC are working day and night to get this scheme up and running. HMRC are also delivering other key schemes to a similar timescale, including the Coronavirus Job Retention Scheme and the Statutory Sick Pay rebate for employers. Furthermore, the Self-Employed Income Support Scheme also allows late tax filers another month to get their 2018-19 tax returns in within 4 weeks of the announcement of the scheme, which also creates some delay.
The Government will do everything it can to implement these measures as quickly as possible – and if we see an opportunity to expedite the process, I am confident that opportunity will be taken. No Government in this history of the United Kingdom, and perhaps anywhere in the world, has ever undertaken such a dramatic package of reforms to support its citizens in such a small space of time.
I appreciate that times are tough, and for some they will get tougher. Nonetheless, I remain confident that all in Government are doing all they possibly can to help and are working as hard as they can in doing so.
More details on support available can be found on the following gov.uk webpage, and via the other links contained within it: https://www.gov.uk/government/publications/support-for-those-affected-by-covid-19/support-for-those-affected-by-covid-19