Rishi Sunak announced on 26 March 2020 that millions of self-employed individuals will receive direct cash grants though a ground-breaking UK-wide scheme to help them during the coronavirus outbreak. The self-employed will receive up to £2,500 per month for at least three months.
80% of average trading profits over the last three years
Millions of people across the UK could benefit from the new Self-Employed Income Support Scheme, with those eligible receiving a cash grant worth 80% of their average monthly trading profit over the last three years. This covers 95% of people who receive the majority of their income from self-employment.
This brings parity with the Coronavirus Job Retention Scheme, announced by the Chancellor last week, where the Government committed to pay up to £2,500 each month in wages of employed workers who are furloughed during the outbreak.
Chancellor Rishi Sunak said:
‘Self-employed people are a crucial part of the UK’s workforce who’ve understandably been looking for reassurance and support during this national emergency.
‘The package for the self-employed I’ve outlined today is one of the most generous in the world that has been announced so far. It targets support to those who need help most, offering the self-employed the same level of support as those in work.
‘Together with support packages for businesses and for workers, I am confident we now have the measures in place to ensure we can get through this emergency together.’
- The scheme will be open to those with a trading profit of less than £50,000 in 2018-19 or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19
- To qualify, more than half of their income in these periods must come from self-employment
- Only those who are already in self-employment and meet the above conditions will be eligible to apply. HMRC will identify eligible taxpayers and contact them directly with guidance on how to apply.
- The income support scheme, which is being designed by HMRC from scratch, will cover the three months to May. Grants will be paid in a single lump sum instalment covering all 3 months, and will start to be paid at the beginning of June
- Individuals should not contact HMRC now. HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational
- Before grant payments are made, the self-employed will still be able to access other available government support for those affected by coronavirus including more generous universal credit and business continuity loans where they have a business bank account
The scheme has been designed after extensive engagement with stakeholders including the TUC, the Federation of Small Businesses and IPSE – The Association of Independent Professionals and the Self-Employed.
Self-employed individuals are already benefitting from a series of measures announced by the Chancellor to boost household incomes and will be able to access these while the new scheme is being rolled out. These include a strengthening of the welfare safety-net with a £7 billion boost to Universal Credit, income tax and VAT deferrals, £1 billion more support for renters and access to three-month mortgage holidays.
‘We all need music more than ever in these difficult times’
The General Secretary of the Musicians’ Union, Horace Trubridge, said:
‘We have been fighting very hard for adequate compensation for our members, and today’s news is extremely welcome. To every member who filled in our impact survey or wrote to their MP, I thank you. We have never stopped pressuring the Government and individual case studies have been invaluable.
‘With over 90% of our 32,000 members being self-employed, today’s measures are vital. We understand that implementing this system will be complex, but we now urge the Government to work to get it in place as quickly as possible. Any help that the MU can give in this process will be readily offered.
‘We all need music more than ever in these difficult times. I thank the Government and every MP across every party who helped to ensure that musicians will now be able to survive to continue playing that music for us.’