The coronavirus (COVID 19) pandemic is having a devastating impact on people across the UK and the world. While emergency measures such as mortgage holidays, Universal Credit changes and a package for furoughed workers have been announced, many have been left wondering whether any financial help will be made available for those in self employed work.
The government will pay self-employed people who have been adversely affected, and the Chanceller said it is possible to claim the grants and continue doing business.
It will be open across the UK for at least three months, and Mr Sunak said he would extend it for longer if necessary.
However, Mr Sunak said that this grant would be available from the beginning of June, with the payments being backdated to March.
Mr Sunak said that to ensure that the he grant is for those who are “most in need”, the scheme is open to anyone with trading profits of up to £50,000.
It is available to people who make the majority of their income from self employment.
However, people who are very recently self-employed will not be able to get the grant, with Mr Sunak eplaining that “only those who have a tax return for 2019 will be able to apply”.
Mr Sunak explained that those who had not filed a self assessment tax return ahead of the deadline back in January, could do so within the next four weeks in order to be eligible.
According to the Chancellor, 95 percent of people who are majority self employed will benefit.
Commenting on the announcement on Twitter, Money Saving Expert founder Martin Lewis wrote: “June is late. I think they are expecting people to claim Universal Credit, and use tax savings to get them through until the June payout.”
Speaking ahead of the live special of The Martin Lewis Money Show, he continued: “#Selfemployment summary
– 80 percent of profits up to £2500/mth
– Profits on 3yrs avg, nowt if over £50k
– Must’ve done self employed 2018/19 tax return
– Payment by June (backdated?)
– Cashflow meanwhile biz interrupt loans, use tax set aside, and Uni credit MORE IN MY SHOW 8:30 ITV.”
Matt Dowling, CEO and Founder, Freelancer Club, commented: “The key question is why did this support take so long? I’ve spoken to thousands of freelancers over the last week and the collective despair has been palpable.
“Some have already had to make heartbreaking decisions to stay afloat. And the impact on their mental health has been stark.
“We do however welcome these measures and urge the Chancellor to expedite access to this support. Waiting for this announcement has set freelancers apart from the rest of the country and moved them closer to the precipice by a whole week.
“Not having the system up and running until June could prove critical and we urge the Treasury to move this deadline sooner. We’re also concerned about the veiled language around future tax arrangements: this may mean further pain for the self-employed next year when they are likely to still be rebuilding their businesses and livelihoods.
“The self-employed and freelance workforce are a vital element of our economy. They give colour and light to the creative industries which will play a key role in getting us through the dark months ahead.
“They are the plumbers, electricians and engineers keeping our homes safe and warm. They are the cleaners, drivers, and workers helping keep vital services running despite risks to their own health. Until now, they’ve been treated like an afterthought. They deserved and deserve so much better.”
Chris Biggs, Managing Director of chartered accounts Theta Financial Reporting, commented: “Up until today, nearly five million self-employed people have seen their income almost completely disappear in a matter of weeks.
“These measures announced by the Chancellor today are a step in the right direction but if this scheme doesn’t start until the beginning of June, millions of people could be in a financial disarray for the next few months.
“Wider it is still unclear what level of support will be given to the ‘self-employed’ who have incorporated and pay themselves a minimal salary and then ‘top’ this up with dividends. This is often a way to manage a business’s risk and cashflow and is practised by thousands of business owners.
“With an upper limit of £2,500, while this may help many self-employed workers, for those in the professional services this still may leave many business owners unable to pay rent, mortgages and any other commitments, which is having and will continue to have severe and detrimental impacts on families across the country.”
John Ellmore, Director of KnowYourMoney.co.uk said “Yet another bold move by the Chancellor. Regardless of one’s political leaning, the government’s determination to ‘do whatever it takes’ to get the UK through COVID-19 is certainly admirable.
“Indeed, the complexity of calculating income for the self-employed will have been an incredibly drawn-out process. Whilst understandable, this support might have come too late for some.
“Many freelancers and self-employed people will already be seeing their finances stretched to breaking point. So, the government must fast track the implementation of this policy.
“Ensuring the clear communication of exactly who is eligible for this support, and how they can access it will be vital. Otherwise, many people’s finances might struggle to bounce back.”