Government unveils self-employed coronavirus financial support scheme

After the Chancellors announcements in the past week, detailing the governments plans to keep people in work and to financially support business, many were left with no support, those people were the self-employed workers.

The government direction up until yesterday evening was that self-employed workers should apply for universal credit. Last night the Chancellor, Rishi Sunak unveiled the government’s aid for the self-employed workers.

Self-employed worker can apply for a grant worth 80% of their average monthly profits to help ease the impact of coronavirus, up to a maximum of £2,500 a month. The money will not arrive before the end of June at the earliest, but will be backdated to March and arrive directly into those eligible’s bank accounts from HMRC. For those who are struggling, they can still apply for universal credit, where the waiting time has been reduced from weeks to days to process the payment.

The government had come under criticism earlier in the week for failing to provide support for self-employed workers in its financial support package.

To receive the grant at least half of self-employed workers income needs to have come from self-employment as registered on the 2018-2019 tax return filled in January, those who missed the deadline now have four weeks from yesterday to get this done and still qualify.

The scheme is open to those who earn under 50,000 a year, which is around 3.8 million of the registered 5 million people registered as self-employed.

A big difference from the employee scheme is that the self-employed can continue to work as they receive the government support.

The grants will be taxable and will need to be declared on tax returns by January 2022. The scheme does not include those who pay themselves a dividend.

According to the government, the Chancellor’s self-employed scheme will help 95% of people who earn most of their income via self-employment.

This is a much welcomed financial lifeline for those who were not covered by the governments previous financial support measures. It will now be crucial that all of this financial support is handed out to those who need it as quickly as possible during this uncertain environment.

The British Chambers of Commerce (BCC), together with its network of Chambers have been fighting for this support ever since the support measures were announced by the government, so to see this now being implemented is a big win for the important self-employed sector that contribute to the economy, BCC Director General Dr Adam Marshall said:

“Chambers, along with other business groups, have worked constructively with government to ensure the self-employed receive similar support to those who are employed through PAYE.

“We welcome the scale of this scheme and recognise the complexities involved in its design. It is now critical that the government delivers this practical support to people on the ground as soon as possible.”

For all the latest support, guidance and advice on what is available to your business, please visit our dedicated Coronavirus Information Hub and we urge all businesses to get in touch by calling 01905 673600 for further advice on how your business can survive these most unprecedented of times.