Self-employed workers will get 80% of their average salary under an “unprecedented” economic coronavirus survival plan, Chancellor Rishi Sunak has announced.
The chancellor said the move – worth up to a maximum of £2,500 a month – would cover 95% of the UK’s five million self-employed workers.
The money will be paid in a single lump sum, but will not begin to arrive until the start of June at the earliest.
The package comes after the UK Government was criticised for omitting the self-employed from its initial package of financial support.
Speaking at a Downing Street press conference, Mr Sunak said he was “proud of what we have done so far” to help workers, but admitted that the self-employed needed more help.
Addressing them directly, he said: “You have not been forgotten. We will not leave you behind. We all stand together.”
Mr Sunak added: “We are covering the same amount of income for a self-employed income as we are for furloughed employees who also receive a grant worth 80%.
“That’s unlike almost any other country, and makes our scheme one of the most generous in the world.
“Providing unprecedented support for self-employed people has been difficult to do in practice, and the self-employed are a diverse population with some people earning significant profits. So I have taken steps to make this scheme deliverable and fair.”
MPs have welcomed the scheme, but have raised concerns over the lag in payment time.
Labour’s shadow chancellor John McDonnell said: “My worry is that if people cannot get access to the scheme until June it will simply be too late for millions. People need support in the coming days and fortnight.
“Asking people to rely on Universal Credit when more than 130,000 people are queuing online will be worrying to many people, so there is a real risk that without support until June the self-employed will feel they have to keep working, putting their own and others’ health at risk.”
SNP Westminster leader Ian Blackford added: “It is extremely concerning that the people with bills to pay and families to feed will have to wait until June for the support they need now.
“The UK government must use the tax and welfare system to provide a guaranteed income for everyone, and bring forward emergency universal basic income.”
The scheme will be open to those with a trading profit of less than £50,000 in 2018-19 or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19.
To qualify, more than half of their income in these periods must come from self-employment.
To minimise fraud, only those who are already in self-employment and meet the above conditions will be eligible to apply. HMRC will identify eligible taxpayers and contact them directly with guidance on how to apply.
The income support scheme, which is being designed by HMRC from scratch, will cover the three months to May.
Grants will be paid in a single lump sum instalment covering all three months, and will start to be paid at the beginning of June.
Individuals are advised not to contact HMRC now as the department will use existing information to check potential eligibility and invite applications once the scheme is operational.
Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the coronavirus job retention scheme if they are operating PAYE schemes.