Help for the self employed

Government unveils long awaiting raft of measures to help self employed people who’ve seen their income shrivel due to the coronavirus outbreak

Coronavirus news image of globe surrounded by viruses

 

Campaigners have welcomed government steps to support self employed people affected by the coronavirus outbreak.

Chancellor Rishi Sunak finally announced measures yesterday. The self-employed will receive a taxable grant based on their earnings over the last three years. It’ll be worth up to 80% of their average earnings in that period. And it’ll be capped at a maximum of £2500 per month.

IPSE, the Association of Independent Professionals and the Self Employed, claimed victory after intensive lobbying over the last few weeks. They reckon the measures will be welcome to most of the self-employed. Recent IPSE research found over two in five freelancers (43%) say that without support they might have had to close their businesses in the next three months. On average, they said they think their savings could cover them for 22 weeks if they had to stop working. Although among sole traders this is lower at approximately 14 weeks.

Historic lifeline

Derek Cribb, CEO of IPSE (the Association of Independent Professionals and the Self-Employed) said: “We welcome the fact that the government has heeded our calls and actively worked with IPSE in designing a historic lifeline of financial aid for the self-employed. This will offer essential support to the many hard-working self-employed people across the country who are losing projects and contracts because of the coronavirus outbreak.

“We understand this is an immense and complex undertaking, and urge the government to get this vital support to freelancers as soon as practically possible. This is an unprecedented package and a very welcome response to our campaign for freelancers and the self-employed.

“While this assistance is practical and wide-ranging it does not, however, cover all self-employed people. We will keep working to fill in these gaps. With our mission to support and promote the work of independent professionals and the self-employed, we will keep striving to stop those in need from being left behind.”

Fairness

The new scheme for the self employed matches the job retention scheme announced previously for employed people unable to work due to the coronavirus pandemic. The Chancellor said treating both employed and self employed people equally brought up an issue of fairness. He hinted this may mean increased National Insurance contributions or higher taxes in the future for self employed people.

The Chancellor says the scheme will cover 95% of the self employed. He added that this was in addition to other measures previously announced for the self employed, including deferring self assessment payments until January and opening up access to Universal Credit in full to the self employed. Anyone who missed the January deadline for their tax return will get extra time to file.

However criticisms have been levelled at the system. It won’t come on stream until June. Payments made in the summer will be backdated. But it means self employed people have to wait three months before receiving the cash. And anyone who has only gone self employed recently seems to be left out of the system.





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