UK government unveils aid for self-employed

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Media captionChancellor Rishi Sunak announced the grant

Self-employed workers can apply for a grant worth 80% of their average monthly profits to help them cope with the financial impact of coronavirus, the chancellor has announced.

The money – up to a maximum of £2,500 a month – will be paid in a single lump sum, but will not begin to arrive until the start of June at the earliest.

Rishi Sunak told the self-employed: “You have not been forgotten.”

Wage subsidies of 80% for salaried employees were announced last week.

Shortly after the chancellor spoke, the number of people in the UK who have died with Covid-19 – the disease caused by coronavirus – jumped by more than 100 in a day for the first time.

The total now stands at 578.

The government had faced criticism for failing to provide support for self-employed and freelance workers in its earlier package of economic measures.

Mr Sunak said the steps taken so far were “already making a difference” but it was right to go further “in the economic fight against the coronavirus”.

  • Self-employed people will be able to apply for a grant worth 80% of their average monthly profits over the last three years, up to £2,500 a month.
  • At least half their income needs to have come from self-employment as registered on the 2018-19 tax return filed in January – anyone who missed the filing deadline has four weeks from now to get it done and still qualify.
  • The scheme is open to those who earn under £50,000 a year – up to 3.8 million of the 5 million people registered as self-employed.
  • Unlike the employee scheme, the self-employed can continue to work as they receive support.
  • The money, backdated to March, will arrive directly into people’s banks accounts from HMRC, but not until June.
  • The grants will be taxable, and will need to be declared on tax returns by January 2022.
  • Company owners who pay themselves a dividend are not covered.

The scheme does not cover people who only became self-employed very recently – the chancellor said they would have to look to the benefits system for support.

Coming up with a workable scheme had been “difficult”, he continued, because the self-employed were a “diverse population” and some of them earned a great deal.

But in all, the “fair, targeted and deliverable” plan would help 95% of people who earn most of their income via self-employment.

“We have not left you behind, we all stand together,” he added.

Communities Secretary Robert Jenrick later told the BBC’s Question Time that even where self-employed workers were unable to provide full financial records going back three years, the government was urging people to “give us what they’ve got and we will work through it with HMRC to see if there’s a way to support you”.

The Federation of Small Business, which represents many self-employed workers, welcomed the intervention, saying: “Although the deal is not perfect, the government has moved a very long way today.”

But Labour’s shadow chancellor John McDonnell said he was worried the money would come “too late for millions”.

“People need support in the coming days and fortnight… 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.”

Labour leader, Jeremy Corbyn, said the government had been too slow to recognise the severity of the crisis.

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Media captionCoronavirus: Jeremy Corbyn says government has been “too slow”

Torsten Bell, from think tank the Resolution Foundation, said the very significant package stood in “stark contrast” to the “much less generous” support being given to employees who lose their jobs or see their hours cut during the crisis.

The Coronavirus Self-Employment Income Support scheme is another extraordinary, multi-billion pound support, reflecting the brutal economic impact of a shutdown designed to keep the pandemic in check.

In recent days, Treasury ministers appeared to be trying to dampen down expectations, telling MPs it was problematic to establish a fair scheme, and the employee job retention scheme would be the logistical priority.

The government wants to set up the scheme to keep employed jobs as the priority first, so the banks will need to be relied on to support many of the self-employed with overdrafts to tide them over until the grant goes into their bank accounts in about 10 weeks’ time.

The sting in the tail? The chancellor said he can no longer justify, after things get back to normal, that self-employed people pay less tax than the employed. But that is for another day.

In the UK, more than 11,600 people have now tested positive for coronavirus – although the actual number of cases is likely to be far higher.

The peak of demand for intensive care was expected to come in two to three weeks, but speaking alongside the chancellor at Thursday’s briefing, England’s deputy chief medical officer, Dr Jenny Harries, refused to be drawn on any predictions.

She said the UK was “only just starting to see a bite in the interventions – the social distancing – that have been put into place”, but things appeared to be “starting to move in the right direction”.

The government has imposed strict controls on everyday life designed to slow the spread of the disease.

In other developments:

  • Police have been given new powers arrest people who break coronavirus lockdown.
  • The government has blamed a communications mix-up for missing the deadline to join an EU scheme to get extra ventilators for the coronavirus crisis – ministers had been accused of putting Brexit before public health
  • Clarence House said Prince Charles was “enormously touched” by the hundreds of get-well messages he received following his positive test for coronavirus
  • The UK has become the largest contributor to the international coalition to find a coronavirus vaccine after donating £210m in new aid funding, Downing Street said
  • About 170 Britons stranded in Peru have returned to the UK on the first government-chartered flight
  • Number 10 insists the government is on course to test 10,000 people a day by the end of the week, despite testing just 6,643 on Wednesday
  • The government extends its target for volunteers to help the NHS to 750,000, after an “amazing” 560,000 people signed up since Tuesday, Downing Street says
  • In the US, the Senate has passed a $2tn (£1.7tn) disaster aid bill which includes $1,200 for most adults, as a record number of Americans file for jobless benefits
  • Worldwide, there are more than 500,000 recorded infections, and more than 22,000 deaths

Read more: https://www.bbc.co.uk/news/uk-52053914

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