This is how much self-employed workers will get from the Government’s coronavirus rescue package

This is how much self-employed workers will get from the Government’s coronavirus rescue package
Rishi Sunak promised protection for staff workers almost a week ago. (Photo: Shutterstock)

The Chancellor, Rishi Sunak, has unveiled emergency financial measures to help self-employed workers at the daily Downing Street news conference.

The Chancellor has said that self-employed people who are facing financial difficulties due to the ongoing health crisis will have 80 per cent of their wages covered by the government.

The financial package, which promises help for groups such as builders, taxi drivers, hairdressers and childminders, comes after the Government faced widespread criticism for not protecting the sector sooner.

80% of wages to be covered

The Chancellor announced that self-employed workers will be able to access a taxable grant that is worth 80 per cent of their average monthly profits over the last three years, up to the value of £2,500 per month.

The scheme will be open for at least three months across the UK, and will be extended if necessary.

The grant covers the same amount of income as the government has offered for furloughed employers, who have also been offered a grant worth 80 per cent.

When will the scheme be available?

Chancellor Rishi said HMRC is working urgently and he expects people to be able to access the scheme no later than the beginning of June.

If eligible, HMRC will contact workers with an online form and will then pay the grant straight into their bank account.

To ensure workers who need the grant do not miss out on support, the government is allowing anyone who was late in filing their tax return in January four weeks from today (26 Mar) to submit their tax return.

How can I apply?

People cannot apply for te scheme yet, but HMRC says if you are eligible for it they will contact you and invite you to apply onlineh.

It urged people not to contact them directly, and said doing so would only delay the “urgent work being undertaken to introduce the scheme”.

It also warned people that if they receive texts, calls, or emails claiming to be from HMRC that ask for financial details or to click a link in order to claim financial support or tax refunds, it is a scam.

How much money will self-employed workers get?

The Chancellor has said the scheme will match that of the scheme offered to furloughed workers, ensuring the self-employed will receive 80 per cent of their earnings.

The payment will be based on average monthly profits over the last three years and will be capped at £2,500 per month

Speaking at the Downing Street press conference, Chancellor Rishi said: “To support those who work for themselves, today I am announcing a new self-employed income support scheme.

“The Government will pay self-employed people who have been adversely affected by the coronavirus a taxable grant worth 80 per cent of their average monthly profits over the last three years, up to £2,500 a month.”

Who qualifies for the scheme?

The Chancellor said the scheme is only open to those with trading profits up to £50,000, who make a majority of their income from self-employment.

To minimise fraud, only those who are already in self-employment, who have a tax return for 2019, can apply for the scheme.

Other self-employed people, who also earn money separately as salaried employees, should be covered by the government’s Coronavirus Job Retention Scheme.

What if I am employed by a company?

The government has urged businesses not to lay off staff amid the coronavirus pandemic, and has promised to help support them financially instead.

Last week the Chancellor unveiled the Coronavirus Job Retention Scheme, which protects employed workers from layoffs and covers 80 per cent of their wages up to £2,500 a month.

If your employer intends to use the scheme, they will classify you as a furloughed worker, meaning you are kept on your employer’s payroll, rather than being laid off.

But while you are furloughed, you should not work for your employee.

The government says that your employer could choose to fund the differences between this furlough payment and your salary, but that it does not have to.