Chancellor Rishi Sunak has announced that support for self-employed traders will continue throughout the winter.
In a statement made to parliament on 24 September, the chancellor announced that he would be extending the already-existing self-employed grant on similar terms and conditions to the new Jobs Support Scheme.
The extension of support forms part of the chancellor’s Winter Economy Plan to help prop up the UK’s economy throughout what is expected to be a tough winter.
What will the new support entail?
The new self-employment grant will cover 20 per cent of a self-employed person’s average monthly profits from November to January next year, up to a total of £1,875.
From February 2021 to the end of April, a second grant will be available to self-employed workers. It has not yet been announced how much this second grant will cover.
Only those who made less than £50,000 a year in profit between the 2016 and 2018 tax years were eligible to claim the previous grants. Payments were based on the average 80 per cent of earnings, up to £2,500 per month.
Who is eligible?
Businesses must be actively trading in order to be eligible for the grant, even in cases where they’re facing reduced demand because of the pandemic.
Anyone who was eligible for the original self-employment income support scheme (SEISS) will be entitled to the new help.
Information about when applications will open has not yet been released.
What other help is available for the self-employed?
- Income tax deferrals will allow the self-employed to defer self-assessment income tax payments (usually due in July) to be deferred until the end of January 2021
- Coronavirus business interruption loan scheme: small and medium businesses can get overdrafts and loans of up to £5 million for up to six years, with the government guaranteeing up to 80 per cent
- Rent support: those businesses struggling to pay rents will be protected from eviction until the end of June
- Grants: small businesses can get grants of up to £10,000 to help with ongoing business costs
- VAT: the government is allowing VAT payments to be deferred for three months
- Business rates holiday: a 12-month long business rates holiday is available for many businesses
- Tax bills: small and medium sized businesses who are struggling to afford tax bills can ask for a “time to pay arrangement” to suspend debt collection
What other measures have been announced?
The chancellor has confirmed that the Jobs Support Scheme will replace furlough when it ends at the close of October.
Under the new scheme, so-called “viable” jobs will be saved by the government topping up the wages of people who work at least a third of their usual hours.
Extra time has been given to businesses who have taken out “bounce back” loans to pay them back, with a new Pay as You Grow initiative. Small businesses will be able to extend their bounce back loan terms from six to ten years, almost halving the average monthly repayment.
Mr Sunak said in Parliament, "These are radical interventions in the UK labour market. These are policies never tried in this country before.
"The resurgence of the virus, and the measures we need to take in response, pose a threat to our fragile economic recovery."
But he acknowledged "we can't save every business" and "we can't save every job.”