COVID-19: SUPPORT FOR SELF EMPLOYED

On 26th March the UK Chancellor finally bowed to pressure from MPs, business organisations, and individuals, and unveiled a self-employed income support scheme.

To ensure you are informed of what has been announced, below is a summary of the key points of how the scheme will operate:

  • The Government will pay self-employed people who have been adversely affected by COVID-19 a taxable grant worth 80% of their average monthly profits over the last 3 years.
  • Those with shorter trading histories will have their monthly payment calculated from that history; i.e. those who have submitted two tax returns will have an average taken for those two years.
  • Those who have started trading in the current 2019/2020 tax year are not eligible for the scheme.
  • The grant will be capped at £2,500 per month.
  • The scheme will be open for at least three months.
  • Individuals will be able to claim the grant whilst trading.
  • The scheme is open to anyone with trading profits of up to £50,000.
  • The scheme is only available to those who make the majority of their income from self-employment.
  • Only those who are already in self-employment, who have a tax return for the tax year 2018/2019, will be able to apply.
  • HMRC are currently setting up the scheme and expect people to be able to access it from the beginning of June.
  • Those eligible will be contacted by HMRC directly and asked to fill in a form online.
  • Anyone who missed the January 2020 filing deadline for their tax return has an additional 4 weeks from today (26 March) to submit it in order to qualify for the scheme.

Let me first of all say that I welcome support for those who are eligible and recognise that this will benefit a large number of my constituents.

I am, however, incredibly disappointed by the scheme’s huge shortcomings. From the correspondence I have received from hundreds of my constituents in recent days, I recognise that financial assistance is required urgently.

Many self-employed people have already lost their income altogether, or have seen it significantly reduced. The Chancellor is asking you to wait for over two months before the first payment is made. That is unrealistic, unacceptable, and fails the first basic requirement of an emergency scheme.

Secondly, those who have recently become self-employed will be massively disadvantaged. Those with only one year’s trading history, for instance, will qualify for a grant which reflects their start-up trading profits rather than their current income. More alarmingly, those who have begun trading within the current tax year are disqualified from this support. Instead, they will be expected to depend upon the paltry £94 per week offered by Universal Credit.

The Chancellor has deliberately delayed his announcement until Parliament has gone into recess and MPs are unable to properly hold him to account in the House of Commons. I am bitterly disappointed that he has chosen to act in this manner, given the consensual way in which parties have been working in recent days and weeks as we navigate through the Coronavirus crisis.

This scheme simply does not deliver for my constituents in West Dunbartonshire, nor for the wider economy. I find it deeply concerning that hard-working people with bills to pay will have to wait until June for the support they need right now.

This agonising wait for months means that a huge number people will now be forced to apply for Universal Credit regime, which itself has a built-in five week wait before the first payment is made. This is totally unacceptable and people will really struggle to make ends meet.

My colleagues and I in the SNP and other parties will continue pressing the UK government to take further steps to ensure as fair a package of financial support as possible for everyone.

Details of the Coronavirus Self Employment Income Support Scheme are available here: www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

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