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CoronavirusLatest NewsFreelance workersJob creation and lossesLabour market

Self-employed eligible for 80% of monthly pay

by Jo Faragher 26 Mar 2020
by Jo Faragher 26 Mar 2020 The measures will be announced at the Prime Minister's daily press conference
JULIAN SIMMONDS/Daily Telegraph/PA Wire/PA Images
The measures will be announced at the Prime Minister's daily press conference
JULIAN SIMMONDS/Daily Telegraph/PA Wire/PA Images

Chancellor Rishi Sunak has now unveiled measures to support self-employed workers who have been hit financially by the coronavirus. 

Freelance workers will be eligible to claim 80% of profits, up to £2,500 a month, based on their average monthly profits over the last three tax years, he said. 

The scheme matches the coronavirus job retention scheme announced last week for PAYE workers, which guaranteed to cover 80% of employed workers’ salaries up to £2,500 per month, backdated to 1 March. However, it is unlikely to be up and running until June, he warned. 

Sunak called the self-employed income support scheme “one of the most generous in the world”. 

He said: “I know that many self-employed people have been deeply anxious about the support available to them. You have not been forgotten; we will not leave you behind; we all stand together.” 

He said that self-employed workers could access the support grant and continue to do business, and the scheme is only open to anyone with trading profits of less than £50,000 per year. 

To minimise fraud, the scheme will only be open to those who have submitted a tax return for the 2018/19 tax year. 

The chancellor said that drawing up plans to support the self-employed had been “difficult to do in practice” because freelance workers are such a “diverse population”. 

The government has come under increasing pressure to announce support measures for self-employed workers, particularly after announcing stricter lockdown measures earlier this week. Many self-employed workers in fields such as construction have continued to head to work – despite being urged not to. 

Until today’s announcement, options for self-employed workers consisted of applying for state benefit Universal Credit or claiming the equivalent of statutory sick pay, set at £94.25 a week. These options will continue to be available, Sunak said. 

According to Stephen Barclay, chief secretary to the Treasury, up to a fifth of self-employed people are already on Universal Credit.

Adam Marshall, director general of the British Chambers of Commerce, told BBC Radio 4 this morning: “We just need a system in place very quickly to get help to some of these businesses, because so many of them are counting time in hours and days rather than weeks and months, they simply don’t have the cash to keep going for that long.” 

“So whether it’s via bank records, whether it’s via the tax system, the Treasury has got to come up with something that enables cash to get to the front line for the self-employed and sole traders quickly.” 

Sunak’s address regarding the self-employed also included a hint that they could lose tax advantages in future. He reassured freelancers that he was equalising their support with that of employed workers, but added that “we must all pay in [to the tax system] equally in future”. 

Jo Faragher
Jo Faragher

Jo Faragher has been an employment and business journalist for 20 years. She regularly contributes to Personnel Today and writes features for a number of national business and membership magazines. Jo is also the author of 'Good Work, Great Technology', published in 2022 by Clink Street Publishing, charting the relationship between effective workplace technology and productive and happy employees. She won the Willis Towers Watson HR journalist of the year award in 2015 and has been highly commended twice.

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4 comments

Avatar
Derek Harris 27 Mar 2020 - 12:54 pm

You say: “To minimise fraud, the scheme will only be open to those who have submitted a tax return for 2019.”

I presume you mean the tax year 2018/19? That ended 4th April 2019?

Reply
Ashleigh Webber
Ashleigh Webber 30 Mar 2020 - 10:54 am

Derek, you are correct. I have amended the article to make this clearer.

Reply
Avatar
Andrea Cockayne 13 Jun 2020 - 3:09 pm

Still a load of rubbish, my husband id a ceramic Tiler. He earned 27000 in 2018/19 after tax return he received an income of 2000 a month. He received £1300 for the 3 months.
It’s an income just like paye, yet they are removing the majority of income and paying a pittance based on trade profits? As a sole trader in construction, there is no profit, only an income. Self employed have been left to rot!

Reply
Avatar
Tax return Melton 20 Jul 2020 - 3:27 pm

regarding the self-employed also included a hint that they could lose tax advantages in future. He reassured freelancers that he was equalising their support with that of employed workers, but added that “we must all pay in [to the tax system] equally in future

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