Government announces coronavirus self-employed income support scheme

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Some of the business soloists due to be excluded from the grants, which HMRC will not start paying until June, have an average annual income of £200,000, the chancellor claimed.

However, a four-week grace period has been announced from today to allow those who have yet to file their tax returns from a year ago to do so, in order to be able to use the scheme.

The British government will pay grants to self-employed people who have lost their livelihoods because of the coronavirus lockdown, further extending an unprecedented package of measures to prevent the economy from collapsing.

To make sure the scheme provides targeted support for those most in need it will be open to anyone with trading profits of up to £50,000 "to make sure only the genuinely self-employed benefit", Sunak explained.

"And the other assumption is that you are now going to be able to use those reserves to help fund your spending needs - in lieu of earning money now, during this pandemic".

The Chancellor later said drawing up plans to help self-employed people had proved "incredibly complicated".

The scheme will be open to people in the United Kingdom for at least three months, but Sunak said it will be extended if necessary. The grant will be paid directly into their bank account.

"This could either be a reference to the reforms to the IR35 legislation that have been delayed", said the accountant, "or [it could be] preparation for a change to the taxation system for self-employed people". He added that there was a need to tackle bogus self-employment after the crisis.

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He also said that the very newly self-employed, who are not covered by the scheme, should look at the increased welfare support available.

The government advises that individuals should not contact HMRC now. Those who are eligible will be contacted directly by the HMRC and will need to complete a form.

Speaking during a press conference at Downing Street, Mr Sunak said: "I must be honest and point out that in devising this scheme in response to many calls for support, it is now much harder to justify the inconsistent contributions between people of different employment statuses".

The Self-Employed Income Support Scheme will cover 80% of average earnings over the past three years, up to £2,500 per month.

While the government had previously revealed a raft of financial measures to keep small businesses afloat, there had been nothing offered to the five million self-employed people in the UK.

A euphoric "yes". numerous country's millions of self-employed people were left in limbo after their work dried up in the wake of the coronavirus outbreak.

Nearly as if to prove the accounting boss's point, a landlord posted on LinkedIn: "Yesterday I knocked on my tenant's door and told him he can stay in the property rent free for five months". 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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