Rishi Sunak said the new scheme will run for a minimum of three months, with scope for an extension ‘if it is needed’ and will cover around 95% of self-employed

by JASDIP SENSI 26th March 2020 in Economy, Accountancy Today

Chancellor Rishi Sunak

Chancellor Rishi Sunak has announced the government will pay self-employed people a taxable grant based on their previous earnings over the last three years, worth up to 80% of earnings, and capped at £2,500 a month.

Sunak said it will run for a minimum of three months, with scope for an extension “if it is needed”. 

He added that the new scheme is “unlike almost any other country”, and claims it is “the most generous in the world”. He continued: “The scheme is targeted and deliverable and offers unprecedented support.”

The scheme will be open to anyone with trading profits of up to £50,000 with the chancellor noting it is equivalent to the support available to the employed.

Applicants will also need to make the majority of their income from self-employment, and, to avoid fraud, the scheme will only be open to people who are already self-employed and have a tax return from 2019.

Additionally, Sunak said anyone who missed the January tax return deadline has four weeks from today (26 March) to submit it, and become eligible for the scheme. Self-employed people will also receive welfare support of up to £1,800 a month through universal credit.

The chancellor added he hopes people will be able to access the scheme “no later than June”. 

In a remark that hinted at reform of the tax system, possibly to introduce National Insurance contributions for self-employed people in future, Sunak said: “In devising this scheme, it is now much harder to justify the inconsistent contributions of people in different employment statuses.”

He added: “We have put aside ideology and orthodoxy to mobilise the full power of the British state. It will stand as one of the most significant economic interventions in the history of the british state and by any government anywhere in the world.”

He added, however, that “we will not be able to save every single business or protect every single job.”

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