Self-employed facing weeks with no income

RISHI SUNAK was last night facing a backlash from Britain’s army of self-employed workers after warning they may have to wait for more than a month for a lifeline.

Furious business leaders predicted huge numbers of small businesses and entrepreneurs will go bust during the coronavirus crisis after being told any extra support is unlikely to be available until the end of April at the earliest.

The Chancellor has come under growing pressure to allow self-employed workers to benefit from the same generous wage subsidies promised to millions of employees who face being laid off.

The Government has committed to pay 80 per cent of the wages of employees unable to work due to the coronavirus pandemic, up to £2,500 a month.

Many of Britain’s five million self-employed workers – including 320,000 in Scotland – have reacted angrily after being told they do not qualthe ify. Instead those who fall ill or who are forced to self-isolate have been told they can apply for a Universal Credit payment of £94.25 a week.

They can also apply for new Governmentbacked Business Interruption Loans and grants from their local council.

Ministers are understood to have been drawing up plans to offer income subsidies to self-employed, which are likely to be set lower than 80 per cent of typical earnings.

But this is proving difficult for the Government as the finances of self-employed workers are far more complicated than employees, where pay records can be used.

Mr Sunak told MPs yesterday the Government is working ‘at pace’ to find a solution.

But he said providing extra support for the self-employed is proving ‘problematic’ and time-consuming. He said the self-employed sector ‘contains such a variety of different people that we don’t have the ability to target support’.

‘That’s the challenge we have in designing something that gets to the people that we wanted to help whilst at the same time being affordable, not having to benefit absolutely everybody,’ he said in the House of Commons.

He said it was ‘almost certainly the case’ that the Government would ‘have to build another brand new system to provide support’ for the self-employed.

But he indicated that this unlikely to be up and running until after the end of April, when ministers hope wage subsidies for employees will be available from HM Revenue & Customs. Arguing it is right to prioritise employees who make up the majority of the workforce, he said he was ‘sympathetic to those whose situation is being adversely affected by what is going on’.

But he added the challenge is finding a way to target help at those who need it rather than providing ‘blanket cash subsidies to five million people’.

Mr Sunak said self-employed workers would benefit from the deferral of VAT and self assessment tax payments, and many will be eligible for new Business Interruption Loans from banks.

The comments by Mr Sunak sparked dismay from business groups yesterday who said bank staff appear ‘clueless’ about the new loans.

John Longworth, chairman of the Independent Business Network, said: ‘This is totally ludicrous. We have five million people running businesses, some employing other people. Many of them will now be on the bread line.’ The Chancellor was also urged by two crossparty committees of MPs to do more.

The business energy and industrial strategy committee pleaded with ministers to extend the wage subsidies to the self-employed.

Committee chairman Rachel Reeves said: ‘It is arbitrary that the self-employed should see the large part of their income disappear while other workers enjoy Government protection.’ Treasury committee chairman Mel Stride also asked the Chancellor what extra support will be given to the self-employed.

The Government today announced millions of firms struggling with the crisis can now apply for an additional three months to file their accounts to Companies House.

Referring to the wage subsidy scheme for employees, a HMRC spokesman said: ‘We are working night and day to get the scheme up and running and we expect the first grants to be paid within weeks – and we’re aiming to get it done before the end of April.’

‘Working at pace to find a solution’