Chancellor Rishi Sunak announces emergency support for self-employed

Oscar Williams-GrutSenior City Correspondent, Yahoo Finance UK
Yahoo Finance UK
Chancellor Rishi Sunak speaks during a media briefing in Downing Street, London, on coronavirus (COVID-19). (PA Video/PA Images via Getty Images)
Chancellor Rishi Sunak speaks during a media briefing in Downing Street, London, on coronavirus (COVID-19). (PA Video/PA Images via Getty Images)

Chancellor Rishi Sunak has announced a special package of support for the self-employed, promising to pay them up to £2,500 ($3,000) per month during the coronavirus shutdown.

In a special address on Thursday, Sunak said the government would launch a new self-employed income support scheme. Under the programme, the state will pay self-employed people a taxable grant worth 80% of their average monthly profits over last three years, up to a maximum of £2,500.

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The scheme will be open to those with profits of up to £50,000 and who earn the majority of income from self-employment. Only those already in self-employment and with a tax return for 2019 will be eligible, although the tax deadline will be extended by four weeks.

“The scheme I’ve announced today is fair,” Sunak said. “It is targeted to those who need it the most and crucially it is deliverable.

“95% of people who are majority self-employed will benefit.”

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The self-employed income support scheme will run for an initial three months but could be extended. People will be able to continue working while claiming the grants.

The grants are in-line with the wage subsidies announced by the government for salaried workers last week. However, Sunak said the new scheme would likely only be up and running by June — leaving the self-employed with a wait of almost three months before cash comes through.

The Chancellor said those who cannot wait until June can apply for a loan under the coronavirus business interruption loan scheme, announced last week, or apply for universal credit.

He said the package of support announced on Thursday was ”one of the most generous in the world” and called it the “next step in the economic fight against the coronavirus pandemic”.

“You have not been forgotten,” Sunak said of the self-employed. “We will not let you behind. We all stand together.”

He added that he was aware many self-employed people have been “deeply anxious” in recent weeks.

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Mike Cherry, chair of the Federation of Small Businesses, called the announcement a “bold support package” that “will give much-needed help to vast numbers of self-employed workers”.

Dr Adam Marshall, director general of the British Chamber of Commerce, said the measures would give “a lifeline to the vast majority of the UK’s 5 million self-employed people, many of whom have seen their livelihoods vanish overnight.”

Sunak’s announcement follows days of pressure on the government to provide help to the self-employed — everyone from consultants and lawyer to musicians and Uber drivers.

Calls for action grew after the government last week announced an “unprecedented” scheme to subsidies 80% of employee wages in a bid to stop widespread redundancies. Critics said the measures didn’t go far enough and left Britain’s 5 million self-employed people facing a bleak future.

“This is clearly an area where further action is needed by the Government,” said Conservative MP Mel Stride, who chairs the influential Treasury Select Committee, in a statement on Tuesday.

Stride said his committee had received over 14,000 letters in recent days “mostly on issues relating to self-employment, from people who work in a wide variety of professions, including childminders, taxi drivers and hairdressers.”

The prime minister and the chancellor had both said measures were urgently being worked on in recent days but faced delays due to the complexity of issues, such as how to work out what to award each person and how to make the system fair.

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