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The Chancellor Rishi Sunak has announced an income protection scheme for the self employed affected by the coronavirus pandemic.
The Government has announced a package of support for low and middle-income self employed people affected by the coronavirus pandemic.
The move will affect many workers over 50 who now account for almost half the UK’s self-employed, according to recent analysis from the over 50s group Rest Less. It found that there are now 2.3 million self-employed over-50s, an increase of 57 per cent in a decade.
The new self-employed income support scheme will see the Government paying self-employed people a taxable grant based on their earnings over the last three years [or less if they have only been trading for a year or so], worth up to 80% of their average earnings and capped at £2,500 a month. The scheme will run for at least three months.
It matches the job retention scheme announced previously for employed people who are not able to work due to the coronavirus pandemic. The Chancellor made the point that treating both employed and self employed people equally brought up an issue of fairness and this would be reviewed. Commentators believe this may mean increased NI/tax contributions in the future for self employed people.
Those eligible are anyone with trading profits of £50,000, whose income is made up mainly of self employed work and who are already self-employed and have filed a tax return from 2019.
The Chancellor says the scheme will cover 95% of the self employed and it will be accessible from the beginning of June at the latest [and be backdated] through HMRC who will pay the money direct into their account after they have filed the necessary information.
He added that this was in addition to other measures announced previously for the self employed and freelancers, including deferring self assessment payments until January and opening up access to Universal Credit in full to the self employed. And he said anyone who missed the January deadline for their tax return would get an extra four weeks from today so they can benefit from the income protection scheme.
Self employed organisations have welcomed the announcement, although some are expressing concerns about the delay in getting money to people and about newly self employed people who have not yet filed a tax return.
*More information about the scheme are here.