The government will support the UK’s self-employed workers with a cash grant of 80% of their profits over the past three years, up to £2,500 per month.
They will receive cash for three months, from what is known as the Self-Employed Income Support Scheme.
This is designed to bring parity with the Coronavirus Job Retention Scheme announced last week.
Rishi Sunak, Chancellor, said: “Self-employed people are a crucial part of the UK’s workforce who’ve understandably been looking for reassurance and support during this national emergency.
“The package for the self-employed I’ve outlined today is one of the most generous in the world that has been announced so far. It targets support to those who need help most, offering the self-employed the same level of support as those in work.
“Together with support packages for businesses and for workers, I am confident we now have the measures in place to ensure we can get through this emergency together.”
Only those who have submitted a tax return for 2018/19 will qualify, but anyone who has missed the filing deadline will have another four weeks to submit their tax return.
Those who have not worked for themselves for long enough to submit a tax return will not qualify for the scheme.
Richard Beresford, chief executive of the National Federation of Builders (NFB), said: “This hugely welcomed news will support millions of self-employed workers and delivers a message that the government really does believe we are all in this together.
It was also positive to see the Chancellor respond to our requests to ensure medium sized businesses can access the Covid Corporate Financing Facility (CCFF). Some of our members were too large for the small business loan but too small to be investment grade rated.”
Sarah Coles, personal finance analyst, Hargreaves Lansdown, said: “Finally, the government has thrown a lifeline to the self-employed, to help save millions of businesses.
“Unfortunately it’s going to take months to reach people, so some may well have gone under by then. It also comes with a major catch – in future self-employed people are likely to have to pay National Insurance and tax in a way that is more closely matched employed people.
“This package will come as a huge relief to millions of self-employed people, but not all of them.
“Those who have started to work for themselves recently, earn too much, or mix and match self-employed income with work, will not be covered. Even among those who qualify, having to wait possibly until June is likely to cause all kinds of financial headaches.
“Keeping your finances together is hard enough in normal times when you’re self-employed, but doing it when your income has fallen off a cliff is unspeakably hard.
“Fluctuating earnings make it harder to put money aside for the future too – so while a savings safety net is even more important for people who are working for themselves, in reality it’s often difficult to spare the cash. It means many will have little or nothing to fall back on.”
