Left to go it alone

HUNDREDS of thousands of people could be set to miss out on Government coronavirus support for the self-employed. The government has introduced the Self-employment Income Support Scheme (SEISS) to help those whose income has been hit by the outbreak.

However, not everyone who is self-employed is likely to qualify, and the Institute for Fiscal Studies (IFS) has estimated as many as two million could miss out.

The scheme, which initially runs for three months, allows the selfemployed to claim a taxable grant worth 80% of their trading profits, up to a maximum of £2,500 a month.

However, to qualify you need to have been self-employed between March 2018 and April 2019, and submitted a tax return for that period.

Office for National Statistics figures suggest 151,000 people who were self-employed last year had only gone it alone after the end of April.

However, the IFS has suggested up to 650,000 newly self-employed people could actually be hit.

Payouts from the scheme are based on average trading profit from up to three past tax returns - so incomes could potentially be lower for the 431,000 people the ONS says started their own business between March 2018 and April 2019.

The number of people in the UK who are self-employed has been rising - by October to December 2019, there were five million selfemployed people in the UK, up from 3.2 million in 2000.

Those who apply for help through SEISS will have to wait till June for the payments, with the government advising them to apply for Universal Credit if they need support in the meantime.

Stuart Adam, a Senior Research Economist at the IFS, said: “The delay in payments will cause financial hardship for some. But the fact that they can claim benefits for the next three months, and then also claim the earnings replacement in early June, will mean many will ultimately lose little or no income overall.

“But some will fall through the gaps completely – including high earners and the newly selfemployed – and others will see only part of their overall earnings covered, including many who combine self-employment with employment or whose business is set up as a company.”

The IFS estimates 1.3 million people will be ineligible because they received less than half of their income from self-employment, and 225,000 will be ineligible because profits were over £50,000 a year.

Overall, the think tank estimates two million people will not meet the scheme’s criteria. While some will qualify for help through other employment, 675,000 people will miss out completely.

Those who own a limited company are also not eligible for the scheme - owners could claim their salary through support for furloughed employees, but many only pay themselves small salaries and take the rest of their income in dividends, which wouldn’t be covered.

The ONS found in 2019, 932,000 of those who are self-employed said they run a business and 710,000 were the sole director of their own limited company.