Chancellor Rishi Sunak has revealed a bumper package of help for Britain’s army of self-employed workers, but it will take months for any help to reach them.
HOAR revealed last night that the long-awaited package will target the emergency help at low and middle earners only, but only from June.
The Chancellor confirmed today this was the case and payments would be backdated until March, but he would try to get help for people sooner.
As we reported, only Brits who filed a tax return in 2019 will be able to take part.
And it will only be available to people who can prove they have been “adversely affected” – though it’s not yet clear how this would be done.
It’s likely that Brits would have to prove they have had a huge drop in income as a direct result of the crisis.
The Chancellor told Britain’s army of self-employed this evening: “You have not been forgotten. We will not leave you behind. We all stand together.
“What we have done I believe will stand as one of the most significant economic interventions in the history of the British state, and by any government anywhere in the world.”
Cleaners, plumbers, electricians, musicians, hairdressers and other self-employed people who are eligible will be able to apply to HMRC for the taxable grant, using an online form.
Rishi Sunak said his new scheme would:
- Help 95 per cent of the self-employed who rely on it for the majority of their income
- Be open to anyone who has trading profits of up to £50,000
- Allow HMRC to get in touch to fill out forms and money will be paid directly into bank accounts
- Permit anyone who missed the January deadline four weeks to file a return
“The scheme is fair and targeted at those who needed it the most,” he added. “It provides unprecedented support.”
Mr Sunak also hinted that in future he would look to make the tax system fairer between those in work and the self-employed.
At the moment self-employed people pay less tax and different levels of National Insurance.
The self-employed were told should claim Universal Credit and look at other Government help to keep them going until they could get paid.
He said part of the reason for the huge delay was that some Brits hadn’t done a tax return for the most recent year.
And he was giving them an extra four weeks to hand it in so they could get help.
The scheme is also far more complicated than the one for Pay As You Earn workers too, so it would take a bit more time to sort it out.
Lib Dem MP Layla Moran said: “After days of anxious uncertainty, there are still many unanswered questions for people who are already struggling to put food on the table and look after their families.
“Having to wait until early June does not give self-employed people parity with those in full-time work.”
This morning a damning report from the Institute for Fiscal Studies warned that almost one million workers were working in sectors which will mostly be shut thanks to the lockdown.
Almost one in four (23 per cent) self-employed workers were ALREADY living in relative poverty before the coronavirus crisis threatened their livelihoods, they added.
Around 800,000 self-employed construction workers may lose work, if they have not already, said the IFS.
Helen Miller, deputy director at the IFS, said: “Many low-income self-employed workers will see their incomes bolstered by the temporary benefit increases, but they are currently getting a lot less protection than employees.
“It is right that the Government look at what more can be done for this group.”
So far the Government have told everyone who needs emergency help to apply for Universal Credit or to claim sick pay help.
Yesterday the flagship benefits scheme said it had received nearly 500,000 fresh applications for the benefit.
Those with a house can also apply for a three month mortgage holiday, and renters won’t be able to be evicted for the meantime either.
Today’s package comes a whole week after the Treasury’s boss bailed out employees by pledging to pay 80 per cent of their wages up to £2,500 a month to stop them being laid off.
Downing Street sources last night said the same flat offer to fund four fifths of the self-employed workers’ income will not be replicated for them.
One government figure said: “No matter how we do this, there will be people who fall through the gap. What matters most is we get money to those who need it the most as quickly as we can”.
Better off earners are instead judged to have savings they can duck into instead.
Five million Brits – almost one in six of the workforce – work for themselves.
Some 1.7 million of them have already been left out of pocket by the crisis, the Resolution Foundation think-tank warned yesterday.
Mr Johnson told MPs yesterday that the Government will “put our arms around every worker” to help them during the unprecedented crisis.
He told PMQs: “For the first time in our history, to get through this crisis, we’re putting our arms as a country around every single worker, every single employee in this country.
“It is a quite unprecedented step. I know there are concerns about the self-employed, but he’ll be hearing more in the next couple of days from the Chancellor.”