Coronavirus: HMRC ‘working urgently’ to implement self-employed support as Sunak unveils £9bn package
Chancellor hints at changes to the way the self-employed are taxed once crisis is over to ensure “all pay in equally in future”
Self-employed people will get 80% of their average salary covered by the government to help them survive the coronavirus crisis, Rishi Sunak has announced.
The chancellor announced the £9bn aid package amid concerns that up to five million people faced financial ruin unless the Government stepped in to help.
It will be capped at £2,500 a month – the same level of support Sunak gave to workers who are being kept on the payroll by their employers throughout the crisis – and the cash is expected to be available from the beginning of June.
On average, recipients are expected to receive payouts of £940 a month.
Speaking in No.10 Downing Street, Sunak said he was "proud of what we have done so far" to help workers as Treasury civil servants had worked non-stop to develop new support schemes, but admitted that the self-employed needed more help.
Addressing them directly, he said: "You have not been forgotten. We will not leave you behind. We all stand together.
"So to support those who work for themselves, today I am announcing a new self-employed income support scheme.
"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."
The cash will be available for three months, the chancellor said, but that could be extended if the crisis continues for longer.
He added: "We are covering the same amount of income for a self-employed income as we are for furloughed employees who also receive a grant worth 80%.
"That's unlike almost any other country, and makes our scheme one of the most generous in the world.
"Providing unprecedented support for self-employed people has been difficult to do in practice, and the self-employed are a diverse population with some people earning significant profits. So I have taken steps to make this scheme deliverable and fair."
The scheme will be open to those with trading profits of up to £50,000, but only available to those who make the majority of their income from self-employment.
Sunak said: "95% of people who are majority self-employed will benefit from this scheme.
"HMRC are working on this urgently and expect people to be able to access the scheme no later than the beginning of June.
"If you are eligible, HMRC will contact you directly, ask you to fill out a simple online form and pay the grant straight into your bank account."
However, the chancellor also hinted at changes to the way the self-employed are taxed once the coronavirus crisis is over.
He said: "I must be honest and point out that in devising this scheme in response to many calls for support, it is now much harder to justify the inconsistent contributions between people of different employment statuses.
"If we all want to benefit from state support, we must all pay in equally in future."
Sunak also admitted there was "nothing we can do" under the new scheme for people who have only recently become self-employed.
He said: "For those who are very recently self-employed we cannot operate a scheme like this.
"There is just too much complexity, both operationally and fraud risk with that. So, we would have to say to those people, please look at the extra support we have put into the welfare system to support you at this time."
Shadow chancellor John McDonnell said: "My worry is that if people cannot get access to the scheme until June it will simply be too late for millions. People need support in the coming days and fortnight.
"Asking people to rely on Universal Credit when more than 130,000 people are queuing online will be worrying to many people, so there is a real risk that without support until June the self-employed will feel they have to keep working, putting their own and others' health at risk."
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