9 billion pounds of coronavirus support for UK self-employed: wait till June?

(Updated to add following-day reactions) With 5 million self-employed workers in the UK, from builders to hairdressers, fitness trainers to driving instructors, the government will pay grants to those who have lost their livelihoods because of the coronavirus pandemic.

The self-employed who have been adversely affected will receive a taxable grant, Chancellor of the Exchequer Rishi Sunak announced today during the government’s daily press briefing. It’s worth 80% of their average monthly profit over the past three years, up to £2,500 a month.

Here’s a quick round-up of press coverage and links to a few resources. For starters there’s a fact box published by Reuters. It answers these questions:

  • How much do you get? (up to £2,500 a month)
  • Who is eligible? (you’re mostly self-employed; £50,000 limit on trading profit)
  • When will the money be available? (from mid June)
  • How do you apply? (you can’t yet; those eligible will hear from HMRC, the tax people)

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 – Sunak
(government web page about the grants)

The measures cover 95 percent of those who get the majority of their income from self-employment, Sunak said.

Self-employed backers

While setting out the details today Sunak said he’d been talking to organisations including the Federation of Small Businesses (FSB), The Association of Independent Professionals & the Self-Employed (IPSE) and the Trades Union Congress (TUC).

The FSB, which holds a webinar at 2pm on Friday 27 March to explain the financial help available to SMEs (small & medium-sized enterprises) and the self-employed,  welcomed the announcement.

IPSE — its website homepage features an adult working on a laptop while a child alongside does a drawing (UK schools are now closed because of coronavirus) — is positive too.

‘Sting in the tail’

The scheme will cost at least 9 billion pounds, the Financial Times cited the Treasury as saying. The delay in paying the grants until June comes as a “huge sting in the tail,” Labour MP Stephen Doughty told the newspaper.

“What are millions of people supposed to do until June,” he asked. “How do they put food on their tables and pay their bills?”

 

The TUC was broadly supportive but also urged all speed in help getting to those who need it.

As for people who have become self-employed in the past year, Sunak said there’s “really nothing” the government can do to help and directed those people to the welfare system, Bloomberg reported.

The next day…

If Twitter is anything to go by – #selfemployed hashtag – many reactions to Sunak’s plans were less than glowing. How does the scheme help with cash flow now? What about those who went out on their own in the past year?

Anthony Painter, who describes himself as an apprentice brewer, said a basic income would have been far simpler, and fairer for those on lower incomes.

Others pointed out that those who chose to report lower sales figures so as to secure a tax advantage will now rue the day.

Resources

Here are some initial resources that may be of use:

Self-employed, or know someone who is? How about a conversation with your accountant, if you have one. They’ll be all over announcements like this one.

If you’re on LinkedIn (my profile is here) you may want to keep an eye on the posts accountants share about the measures to help the self-employed.

There’s also Citizens Advice, of course and the Money Advice Service.

Any and all unions that you’re a member of might be able to give you advice or point you in a direction you may not  have considered.

Above all, stay safe and take care of yourself. I’ll update this blog as new information and resources become available.

(Image credits: Life-Of-Pix, Monoar and MabelAmber on Pixabay)

*How have you coped with the impact of coronavirus on your business?
Please add a comment; I’ll be sure to reply.*

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