Sunak throws lifeline to self-employed by extending support scheme
Millions of workers have been thrown a financial lifeline after the Government extended its support scheme for the self-employed by three months.
Chancellor Rishi Sunak said that workers will be able to make a second claim of up to £6,570 under the the Self-Employment Income Support Scheme (SEISS), which launched earlier this month.
The self-employed workers had been facing a cliff-edge as support was due to end this weekend.
He also revealed further details of how the Treasury will taper its contributions to companies’ wage bills starting in August, when employers will be asked to share some of the costs of the furlough scheme.
Mr Sunak said: “Our top priority has always been to support people, protect jobs and businesses through this crisis. The furlough and self-employment schemes have been a lifeline for millions of people and businesses.
“Now, as we begin to re-open our country and kickstart our economy, these schemes will adjust to ensure those who are able to work can do so, while remaining amongst the most generous in the world.”
The extension of SEISS is a major boost for the 2.3m self-employed workers who have already submitted claims worth £6.8bn under the scheme.
Mike Cherry, Federation of Small Businesses national chairman, said self-employed workers would be relieved by the announcement.
“Policymakers have rightly recognised that self-employed business owners working in a lot of sectors – not least hair & beauty, events and travel – will be massively impacted by the current downturn for many weeks to come,” he said.
Mr Cherry called for the scheme to be widened to cover more of the UK's 5m self-employed: “Those who have filed a 2019-20 tax return should be in scope for this fresh support, not just those who submitted for the 2018-19 year.”
Directors of limited companies should also be added, he said.
The second round of SEISS payments will be slightly less generous than the first.
Workers such as freelancers and consultants will be able to claim a single payment worth 70pc of their average monthly trading profits, capped at £6,570 over three months.
The cap on the first round of payments was 80pc of trading profits to a maximum of £7,500.
Businesses will be allowed to bring furloughed employees back part time from July 1 - a month earlier than previously announced - in return for a reduction in support from the state. The move is designed to help businesses get back on their feet.
CBI chief Dame Carolyn Fairbairn said: “The changes announced will help ensure the schemes stay effective as we begin a cautious recovery. Introducing part-time furloughing as more stores and factories start to open will help employees to return to work gradually and safely. Many more businesses will feel supported during this vital restart phase.”