Coronavirus: What help will self-employed get from government?" width="976" height="549">
Employees kept on by struggling businesses during the coronavirus outbreak will have 80% of their wages subsidised by the government, but ministers were criticised for not going so far for the self-employed.Now Chancellor Rishi Sunak has announced measures to support them too.
What help is there
Who is eligible?
More than half of a claimant's income needs to come from self-employment.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 2017-18.
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Those who are recently self-employed and do not have a full year of accounts will not receive any help under this scheme.The government's new help comes on top of a six-month delay for tax payments through the self-assessment system.Those with the lowest incomes are in line to receive more generous benefits payments, announced previously. The chancellor said those applying for universal credit should be paid within a few days.
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How do I claim the help?
The chancellor said this will cover 95% of the self-employed who make most of their money from self-employment. This is how it works:
HM Revenue and Customs (HMRC) will use existing information to identify those eligible and will invite applications
The application will require them to confirm that they meet the eligibility requirements
It will be paid straight into a bank account, which eligible taxpayers will need to confirm on their application form
People do not need to contact HMRC now, if they are eligible HMRC will contact them directly
If you pay yourself a salary and dividends through your own company, you are not covered by the scheme but will be covered for your salary by the Coronavirus Job Retention Scheme if you are operating through PAYE.
How many people are affected?
There are more than five million self-employed people in the UK, earning an average of ?781 a month. The number has risen fast since the financial crash of a decade ago.Roughly a fifth are in the construction sector, according to the Office for National Statistics (ONS), with hundreds of thousands of others working in the motor trade, professional services, and education.
As part of the latest announcement, the chancellor also suggested tax breaks for the self-employed may end in the future. This signals a massive change in UK tax policy, potentially equalising the tax treatment of the self-employed.
How does the new help compare with salaried workers?
Unlike employees, there is no sick pay for the self-employed, although there are tax breaks that come with being self-employed, such as lower national insurance.A plan had already been announced for those who are employed.The government says 80% of gross wages in the private sector, up to ?2,500 a month, for those not working and who would otherwise have been laid off will be covered by these grants from HM Revenue and Customs (HMRC).These will be backdated to March and the scheme will last three months at least. The idea is to prevent mass unemployment.
UK economy
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Coronavirus pandemic
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