The Chancellor has launched a multibillion-pound bailout to compensate more than two million self-employed workers hit by the coronavirus crisis.
Rishi Sunak has announced self-employed support in-line with the financial package for furloughed workers. The support scheme will cover 95% of self-employed workers who make the majority of their income from self-employed work.
Only those already with a tax return for 2019 are able to apply, and it is designed to cover 80% of income to a maximum of £2,500 per month. It is based on an average of three years of trading accounts to avoid volatility in trading performance.
It will work in-line with other financial initiatives including:
- Income tax deferrals
- Business interruption loans
- Delayed VAT returns
One major issue identified for self-employed workers is that it will not be up and running until the beginning of June 2020, whereas furloughed worker payments start at end of April.
When payments are made in June it will enable three months payment back-dated to March. And there will be a review on the time-frame required in the not too distant future.
It has been stated that those without three years of accounts can still apply as long as one year has been completed, but those who are still in their first year of trading are currently having to look at other methods of supporting their families.
Despite these issues, The Federation of Master Builders (FMB), welcomed the Chancellor’s actions to help the self-employed, with Chief Executive, Brian Berry, stating: “Construction workers across the country will now be taking a collective sigh of relief knowing they will now be protected in the same way that employees will be if they lose work due to COVID-19.
“I am delighted that the Chancellor has heeded our calls to be generous with his offer to the self-employed, who make up almost 40% of those working in the construction industry. Building companies will now also be able to close sites to protect workers and public health without having to worry about the losses faced by self-employed workers on those sites.
“We now urge the Treasury and HMRC to ensure that all support packages are up and running as soon as physically possible.”