Chancellor Rishi Sunak MP announced the Self-Employed Income Support Scheme, which will allow self-employed people facing financial difficulties to receive 80% of their monthly wages, covered by the Government.
This will be calculated using average monthly profits over last three financial years and support will be capped at £2,500 per month. This new scheme will initially last three months and will be available from “the beginning of June” due to the complexity of the system, however it will be backdated until March. In the interim, self-employed workers will be able to apply for universal credit or access local council emergency funds.
The eligibility requirements for this scheme are as follows:
- It is only for workers who receive the majority of their income from self-employment.
- It will be available for people with trading profits of up to £50,000 or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19.
- Workers must be already self-employed and have filed a tax return for 2018-19. The Chancellor confirmed that the deadline for completing tax returns has been extended for four weeks from today.
The Chancellor stated that 95 per cent of all self-employed workers will be eligible for this new scheme and it is equivalent to the Government scheme for employed workers. Additionally, he stated that this scheme constitutes an "unprecedented level of support" for self-employed workers and stated that “it is now much harder to justify the inconsistent contributions between people of different employment statuses”. These comments therefore suggest that the Government may increase income tax and National Insurance contributions for self-employed workers after the pandemic.
For more information on the scheme click here.