Yesterday, the Chancellor announced that last week’s pledge to underwrite 80 per cent of the wages of employees without work to do during this crisis is being matched with significant grants to the self-employed. This is an important addition to existing plans to support employees, and in many ways a more generous offer.
The Self-Employed Income Support Scheme will pay cash grants covering 80 per cent of self-employed trading profits averaged over up to three years of tax returns, covering the three months to May. The new scheme has the same £2,500 per month cap as that in the Coronavirus Job Retention Scheme for employees, but adds in further exclusions. Those earning over £50,000 are excluded, as are those who only became self-employed in the recent past and so have no tax return for the 2018-19 financial year, and the self-employed who have incorporated as businesses and receive the bulk of their income via dividends or an employee salary (with the latter income source potentially covered by the employee retention scheme, of course).
The Government stressed that 95 per cent of people who receive the majority of their income from self-employment will be covered by the scheme. For this group, yesterday’s announcement represents a huge improvement in the level of prior income they will hold onto (the ‘replacement rate’) should work dry up, matching the employee picture after last week’s retention scheme announcement.
Chosen excerpts by Job Market Monitor. Read the whole story @ Unprecedented support for employees’ wages last week has been followed up by equally significant, and even more generous, support for the self-employed. But gaps remain • Resolution Foundation