Govt to pay 80% of self-employed income as part of virus response

Govt to pay 80% of self-employed income as part of virus response

The government has brought the self-employed into its emergency response to the coronavirus crisis by pledging grants to cover as much as 80 per cent of their earnings during the pandemic. 

Chancellor Rishi Sunak said the government had devised a "deliverable and fair" initiative to cover 80 per cent of self-employed workers' average earnings over the past three years, up to a maximum of £2,500 a month. 

The scheme will be available to all majority self-employed workers with trading profits of up to £50,000 a year, though payments are not expected to start until June.

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Mr Sunak said the scheme would cover 95 per cent of the country's self-employed workforce, bringing them into line with the measures announced for furloughed company employees last week. Those not included in the latest package are estimated to earn £200,000 a year on average.

But the chancellor also raised the possibility of bringing back his predecessor Philip Hammond's proposed national insurance contribution hikes for the self-employed.

"It is now much harder to justify the inconsistent contributions between people of different employment statuses. If we all want to benefit equally from state support, we must all pay in equally in future," he said.

Availability will be limited to those who filed tax returns for 2019. Self-employed workers who had not done so will be able to file returns within the next four weeks if they wish to take part.

Those eligible for grants will be contacted directly by HMRC then asked to fill out an online form, at which point the grants will be deposited into their bank account.

The move follows much speculation this week as to what measures, if any, the government would put in place to protect the self-employed and freelancers during the coronavirus lockdown and resultant economic turmoil. 

Last week Mr Sunak announced the government would cover 80 per cent of at-risk employees' salaries for three months, as part of an expansive series of measures aimed at supporting the UK economy during the crisis.

Mr Sunak labelled the move as "unprecedented in the history of the British state", but the government faced criticism over the self-employed being left out of the measures. 

Hopes were lifted earlier this week when an amendment added to the Coronavirus Bill proposed statutory self-employment pay to cover the lower of £2,917 or 80 per cent of a self-employed person's monthly earnings, averaged over the last three years.

But as the week progressed and the government failed to confirm a package of measures, emotions ran high in the House of Commons yesterday as Boris Johnson faced a grilling from MPs over the delay. 

During prime minister's questions, Ian Blackford, MP for Ross, Skye and Lochaber, warned an estimated 1.7m workers were at risk of losing their income and had been waiting on the "same promises" for weeks without any results. 

Defending his government, Boris Johnson said there were "particular complexities about the self-employed" which had delayed the process.