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Coronavirus: Minister defends wait for self-employed bailout | Coronavirus: Minister defends wait for self-employed bailout |
(about 1 hour later) | |
The 10-week wait for rescue grants for the self-employed whose work has dried up amid the coronavirus crisis has been defended by the government. | The 10-week wait for rescue grants for the self-employed whose work has dried up amid the coronavirus crisis has been defended by the government. |
Chancellor Rishi Sunak has outlined plans for the self-employed to receive a taxable grant worth 80% of their profits for three months. | Chancellor Rishi Sunak has outlined plans for the self-employed to receive a taxable grant worth 80% of their profits for three months. |
But the first payments are not expected until June, by which time many sole traders will be severely stretched. | But the first payments are not expected until June, by which time many sole traders will be severely stretched. |
Business Secretary Alok Sharma said implementation was highly complicated. | Business Secretary Alok Sharma said implementation was highly complicated. |
Research among the self-employed suggests that, on average, sole traders have savings that could tide them over for 14 weeks if they go without work. | Research among the self-employed suggests that, on average, sole traders have savings that could tide them over for 14 weeks if they go without work. |
That means many will use up much of that buffer before the first grant arrives. | That means many will use up much of that buffer before the first grant arrives. |
The Coronavirus Self-employment Income Support Scheme will available for three months in one lump-sum payment, up to a cap of £2,500 a month. | The Coronavirus Self-employment Income Support Scheme will available for three months in one lump-sum payment, up to a cap of £2,500 a month. |
This will benefit millions of people, at a cost to the government of about £10bn, but those in line for the help must wait until June. | This will benefit millions of people, at a cost to the government of about £10bn, but those in line for the help must wait until June. |
Mr Sharma told BBC Breakfast: "The chancellor was very clear that we want to do this as quickly as possible, we've set a date of June, if we can do it faster we will, but it is a complicated system that we are designing and we want to make sure we get it absolutely right." | Mr Sharma told BBC Breakfast: "The chancellor was very clear that we want to do this as quickly as possible, we've set a date of June, if we can do it faster we will, but it is a complicated system that we are designing and we want to make sure we get it absolutely right." |
Some may have to fall back on the benefits system in the meantime, according to business groups. | Some may have to fall back on the benefits system in the meantime, according to business groups. |
Mike Cherry, from the Federation of Small Businesses, said: "Unfortunately, for many people whose businesses have completely stopped, the only option left for them is to claim for things like universal credit. | Mike Cherry, from the Federation of Small Businesses, said: "Unfortunately, for many people whose businesses have completely stopped, the only option left for them is to claim for things like universal credit. |
"This is going to be a huge problem for small businesses - if they are only entitled to statutory sick pay, it might not even cover their fixed costs." | "This is going to be a huge problem for small businesses - if they are only entitled to statutory sick pay, it might not even cover their fixed costs." |
Other self-employed people have expressed dismay that they will not be eligible for the support. | Other self-employed people have expressed dismay that they will not be eligible for the support. |
Many of them have only been self-employed recently, and the assistance requires that they must have completed a tax return to prove their self-employment income. This could mean anyone who has set up since April 2019 will not be eligible and must rely on other support such as the benefits system. | |
This includes people such as Terry Litherland, who set up as an electrician eight months ago, after being made redundant from his previous job. | |
"I went down this path because I thought, if I go self-employed I can get a regular income and I don't have to worry about redundancy again," he said. | |
"I just need to bring money into the house and put food onto the table for the wife and children." | |
Others who face missing out include: | Others who face missing out include: |
The Treasury has stressed that those self-employed people eligible for support will be contacted by HM Revenue and Customs (HMRC), so do not need to do anything at this stage. | The Treasury has stressed that those self-employed people eligible for support will be contacted by HM Revenue and Customs (HMRC), so do not need to do anything at this stage. |
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