New measures are unveiled to help self-employed people whose incomes have been hit.
The Chancellor Rishi Sunak has announced new measures to help self-employed people who face financial difficulties as a result of the coronavirus pandemic.
Self-employed workers can now apply for a grant worth 80% of their average monthly profits.
The money - up to a maximum of £2,500 a month - will not be paid until the start of June at the earliest, but will be backdated to March.
The move comes after the Government faced increasing pressure to do more to help people who are self-employed after they were largely excluded from previous coronavirus support measures. Wage subsidies of 80% for salaried employees were announced last week.
Rishi Sunak told the self-employed: "You have not been forgotten." He said said the steps taken so far were "already making a difference" but it was right to go further "in the economic fight against the coronavirus".
Coming up with a workable scheme had been "difficult", he said, because the self-employed were a "diverse population" and some of them earned a great deal.
But in all, the "fair, targeted and deliverable" plan would help 95% of people who earn most of their income via self-employment.
What’s on offer?
Self-employed people will be able to apply for a grant worth 80% of their average monthly profits over the last three years, up to £2,500 a month.
At least half their income needs to have come from self-employment as registered on the 2018-19 tax return filed in January - anyone who missed the filing deadline has four weeks from now to get it done and still qualify.
Unlike the employee 80% payment scheme, the self-employed can continue to work as they receive support.
The money, backdated to March, will arrive directly into people's banks accounts from HMRC, but not until June.
The grants will be taxable, and will need to be declared on tax returns by January 2022.
The self-employed have also been given longer in which to pay VAT bills, with money due from now until the end of June deferred until April 2021.
Who won't benefit from the new scheme?
There are more than 5 million self-employed people in the UK but not all of them will qualify for help.
The scheme is only open to those who earn under £50,000 a year - up to 3.8 million of the 5 million people registered as self-employed.
Company owners who pay themselves a dividend are not covered.
The scheme does not cover people who only became self-employed very recently and have not filed tax returns - the Chancellor said they would have to look to the benefits system for support.
Those who have separate earnings as company employees, such as people who supplement their main job through the gig economy, and those who are on universal credit will be excluded.
How will money be paid and how do I apply?
The money will be paid directly into your bank account. HMRC will use the average trading profits from tax returns in 2016-17, 2017-18 and 2018-19 to determine the size of the grant.
The HMRC say they will share further information and details of the scheme shortly. They will will use existing information to check potential eligibility and invite applications once the scheme is operational.
Is any other help available?
Today’s announcement builds on measures already unveiled to help people who are self-employed through the current situation.
The Government has previously said self-employed people whose incomes are suffering can claim universal credit, a benefit for people who are unable to work or who earn low incomes.
They can claim it at a rate that is equivalent to statutory sick pay, which is currently £94.25 a week.
The minimum income floor that is used to work out entitlement to the benefit has been suspended.
On top of these measures, homeowners who are struggling to pay their mortgage can apply for a payment holiday of up to three months, while those renting cannot be evicted for the same period, even if they are unable to pay rent.
Top 3 takeaways
1. The Government has announced new measures to help self-employed people who face financial difficulties
2. It will pay up to 80% of recent earnings to freelancers and others who are self-employed and struggling to make a living as a result of the coronavirus pandemic
3. But the help will be capped at £2,500 a month and will not arrive until June
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