Rishi Sunak FINALLY unveils bailout for self-employed

Rishi Sunak finally unveiled a coronavirus bailout for millions of stricken self-employed workers tonight – handing them cash payments of up to £2,500 a month.

A week after announcing a massive rescue package for employees, the Chancellor announced support for those who work for themselves and in the ‘gig’ economy.

Saying he knew people were ‘worrying about their jobs and incomes’, Mr Sunak said: ‘You have not been forgotten.’

But at a press conference in Downing Street he also delivered a stark warning that the government ‘will not be able to protect every single job or save every single business’ as the deadly disease brings the economy grinding to a halt. 

The package offers taxable grants of 80 per cent of average profits over the last three years, up to £2,500 a month. 

However, those who have more than £50,000 in profits will not be eligible, and the scheme is not expected to be up and running until June.  

Mr Sunak said 95 per cent of those who make most of their earnings from self-employment will be covered. 

There will be a grace period of four weeks for people to file tax returns for the last financial year – without which they will not be able to claim.

Economists have suggested around two million workers could benefit from the package. 

Unlike the bailout for employees, which is being channelled through businesses in grants, the government money would go directly to individuals. 

Mr Sunak said: ‘Despite these extraordinary steps there will be challenging times ahead.

‘We will not be able to protect every single job or save every single business.

‘But I am confident that the measures we have put in place will support millions of families, businesses and self-employed people to get through this.

‘Get through it together and emerge on the other side both stronger and more united.’

A week after announcing a massive rescue package for employees, the Chancellor announced support for those who work for themselves and in the ‘gig’ economy

Boris Johnson took part in a video call with G20 leaders today as they struggle to coordinate the response to the crisis

Boris Johnson took part in a video call with G20 leaders today as they struggle to coordinate the response to the crisis

In other developments on another fast-moving day of crisis:

  • One of the government’s top advisers said the UK’s epidemic will get worse before it gets better but could peak by Easter. 
  • Dyson has been handed an order of 10,000 ventilators from the Government – as long as the machines pass early tests. 
  • Retailer Boots begged people not to turn up demanding tests because it has yet to receive any.
  • Royal aides tried to trace anyone Prince Charles has met in the last fortnight after he tested positive for the disease.
  •  The latest coronavirus figures for the UK showed 9,529 positive tests and a death toll of 465.  

Rishi Sunak’s plan to help the self-employed

The Chancellor today unveiled a self-employed income support scheme to help workers stay afloat during the coronavirus crisis. 

Here is what Rishi Sunak announced:

  • Self-employed people will be able to access a taxable grant worth 80 per cent of their average monthly profits recorded over the last three years up to £2,500 a month.
  • The scheme will be open for three months initially but could be extended if it is necessary. 
  • Self-employed will be able to claim the support even if they are continuing to do business. 
  • Amounts to the same amount of protection given to furloughed employees.
  • The targeted support for the self-employed will be open to anyone with trading profits of up to £50,000.
  • It will be available to people who make a majority of their income from self-employment. 
  • Only those who are already in self-employment can claim – so people will need a tax return for 2019 as a minimum.
  • People will be able to access the help no later than the beginning of June. 
  • Those eligible will be contacted by HMRC.
  • Anyone who missed the tax return filing deadline in January, people will have four weeks from today to submit their tax return.
  • Self-employed people can also access business interruption loans while Universal Credit is being simplified so they will be able to get help now while the scheme is set up.

Mr Sunak said:’The scheme I have announced today is fair. 

‘It is targeted at those who need it the most and crucially it is deliverable and it provides an unprecedented level of support for self-employed people.’

He said: ‘These last 10 days have shaken our country and economy as never before.

‘In the last two weeks we have put aside ideology and orthodoxy to mobilise the full power and resources of the British state.

‘We have done so in the pursuit of a single goal: To protect people’s health and economic security.

‘By supporting public services like our NHS, backing businesses and protecting people’s jobs and incomes.

‘What we have done will I believe stand as one of the most significant economic interventions at any point in the history of the British state and by any government anywhere in the world.’

The government has been facing a furious clamour to bring forward a rescue package for the self-employed, with warnings that it is already too late for many who have been unable to pay their bills after swathes of the economy were forced to shut down to curb coronavirus spread. 

It emerged yesterday that almost half a million benefit claims have been received over the past nine days.  

Around 477,000 claims have been ‘processed’ since last Tuesday, with 105,000 being made for Universal Credit yesterday.

The unprecedented pressure and volume of new claims has led to delays and people being unable to get through to advisers on the phone.

Boris Johnson said yesterday that while the Government was ‘putting our arms around’ every worker, he could not guarantee that the self-employed would not face ‘any kind of hardship at all’. 

But the Prime Minister said he wanted to get ‘parity of support’ so the self-employed could have similar levels of protection to workers with jobs. 

He told the Commons yesterday: ‘There are particular difficulties with those who are not on PAYE schemes… I think the whole House understands. We are bringing forward a package to ensure that everybody gets the support that they need.’ 

Asked what this would involve, he said: ‘I cannot, in all candour, promise the House that we will be able to get through this crisis without any kind of hardship at all.’ 

But he added: ‘We will do whatever we can to support the self-employed, just as we are putting our arms around every single employed person in this country.’ 

Last week Mr Sunak unveiled a plan that would see the state pay up to 80 per cent of the wages of employees if firms agree to keep them on. 

But there are, as yet, no measures for the estimated five million self-employed people, who currently have to rely on welfare payments of around £94 a week. 

At a press conference in Downing Street later, Mr Sunak is expected to unveil a ‘huge’ scheme to help subsidise the incomes of self-employed people whose work has evaporated because of the coronavirus.  

It will feature a ‘bespoke’ mix of measures but will include an element of direct income subsidy in the form of non-repayable grants. 

Sources acknowledge that it ‘won’t be direct parity in terms of maths but it will be parity in terms of fairness’. 

This is partly due to the range of workers in the self-employed bracket. While many have lost their income, others have more work. 

Rishi’s rescue: What has the Chancellor announced before?

The government’s bailout for the economy has been announced in stages, starting with the Budget on March 11.

Prior to the self-employed bailout today measures included: 

  • The government will cover 80 per cent of wages for companies to keep workers on.
  • It will pay up to £2,500 a month  – equivalent to the UK average wage of £30,000 a year. 
  • VAT bills worth £30billion of VAT bills for the next quarter will be deferred.
  • A £7billion boost to welfare to ‘strengthen the safety net’ will be made.
  • A £1billion boost to housing benefit to help renters;
  • A £30billion fiscal stimulus in the Budget, including £12billion directly for the fight against coronavirus, with more money for NHS;   
  • Government-backed loan guarantees worth £330billion – equivalent to 15 per cent of GDP. The Treasury will increase this with ‘as much capacity as required’ 

  •  A £20billion package for business including a 12-month rate holiday for all firms in retail, leisure and hospitality sectors, and cash grants of up to £25,000 for smaller companies; 

  • A three-month mortgage holiday for homeowners; 

  • A three-month ban on evictions of renters, and mortgage holiday extended to buy-to-let;

  • The Bank of England has cut rates twice to a record low of 0.1 per cent. Its quantitative easing scheme – effectively printing money to stimulate the economy – has been expanded to more than £600billio

Many earn low wages in the hospitality and leisure sectors, but corporate lawyers and barristers on six-figure salaries are also self-employed. 

Government sources said that in addition they did not want the taxpayer to have to support the incomes of people who have other jobs. 

One source said: ‘With the employee scheme, people are either furloughed or they are not. ‘With the self-employed it’s different – work may have dried up right now but that might change, and this [lockdown] could go on for months.’ 

The sums involved will be ‘huge’ because of the scale of the problem and will run to certainly tens of billions. 

Mr Sunak has consulted several organisations representing the self-employed over the measures. 

A spokesman for one of them, the association of Independent Professionals and the Self Employed, said: ‘We’re quite optimistic. ‘We’ve been calling for a fund to guarantee the income of most self-employed people who are going to lose out in this crisis. 

‘We’re calling for 80 per cent of the wages of the self-employed, the same as employees, to be protected.’ At Prime Minister’s Questions yesterday, MPs from all parties lined up to ask what was being done to help the self-employed. 

Labour leader Jeremy Corbyn said: ‘The self-employed are having to choose whether they go to work or stay at home or face losing their entire livelihood, relying instead on an overstretched welfare system which could pay as little as £94 per week.’ 

Asked yesterday why the package was taking so long to arrive, Mr Johnson said: ‘We have increased universal credit by £1,000 a year. 

‘We have deferred income tax self-assessments for the self-employed until July, and are deferring VAT until the next quarter. There is also access to Government-financed loans. 

‘But there are particular complexities of the self-employed that do need to be addressed; they are not all in the same position.’ 

London mayor Sadiq Khan has said the lack of support for the self-employed has contributed to the numbers travelling into the capital for work despite the lockdown. 

The Resolution Foundation thinktank has estimated that one in three people in self-employment – 1.7million workers – are at risk of losing their income.

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