Government to reveal self-employed support package: what to expect
Chancellor tipped to offer self-employed 80% of their recent earnings - but with a lower cap than PAYE workers
The chancellor is set to announce a package of support for self-employed workers facing financial difficulties because of the coronavirus pandemic.
Rishi Sunak is expected to finally unveil the plan later today after stating that drawing up the measures had proven to be “incredibly complicated”.
The government has been under growing pressure to support the self-employed, amid fears that many will be left financially stranded by the outbreak and forced to keep working even if they have symptoms.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Dr Adam Marshall, director general of the British Chamber of Commerce, told the Daily Mirror people’s livelihoods could vanish “in the blink of an eye”.
What is the chancellor expected to announce?
The Guardian says the taxpayer is expected to pay self-employed workers up to 80% of their recent earnings to help contain the economic impact of coronavirus.
However, it adds, some groups, including those already claiming universal credit, could be excluded.
The Telegraph speculates that Sunak could follow the example of Denmark and Norway by promising to pay contractors a proportion of their income calculated using their earnings over the past few years. Or, it says, he could adopt a French-style model and offer a flat payment for anyone whose earnings drop by more than 70%.
–––––––––––––––––––––––––––––––For a round-up of the most important stories from around the world - and a concise, refreshing and balanced take on the week’s news agenda - try The Week magazine. Get your first six issues for £6–––––––––––––––––––––––––––––––
How would this compare to PAYE workers?
Boris Johnson promised yesterday that the government was preparing to “put its arms around every worker”. Although he suggested that the self-employed would be offered “parity” with pay-as-you-earn tax (PAYE) employees, Whitehall sources said later that the prime minister’s words did not mean the two schemes would be identical.
Sunak’s help for the self-employed could be subject to a lower cap than the £2,500 in monthly pre-tax income available to staff employees, because the self-employed tend to pay less tax.
Why has it been complicated?
Sunak said there were “genuine practical” problems with bringing forward a suitable scheme.
Of the five million people defined as self-employed at any one time, around one million were self-employed last year but are not now. Another million who were not self-employed last year now are.
The BBC’s business editor Simon Jack says the wages of the self-employed can be “lumpy, irregular and intermittent”, so “defining their regular pay packet is very hard and therefore difficult to underwrite accurately”.
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
'Make legal immigration a more plausible option'
Instant Opinion Opinion, comment and editorials of the day
By Harold Maass, The Week US Published
-
LA-to-Las Vegas high-speed rail line breaks ground
Speed Read The railway will be ready as soon as 2028
By Peter Weber, The Week US Published
-
Israel's military intelligence chief resigns
Speed Read Maj. Gen. Aharon Haliva is the first leader to quit for failing to prevent the Hamas attack in October
By Justin Klawans, The Week US Published
-
The birth of the weekend: how workers won two days off
The Explainer Since the 1960s, there has been talk of a four-day-week, and post-pandemic work patterns have strengthened those calls
By Chas Newkey-Burden, The Week UK Published
-
New austerity: can public services take any more cuts?
Today's Big Question Some government departments already 'in last chance saloon', say unions, as Conservative tax-cutting plans 'hang in the balance'
By The Week UK Published
-
Would tax cuts benefit the UK economy?
Today's Big Question More money in people's pockets may help the Tories politically, but could harm efforts to keep inflation falling
By The Week UK Published
-
Why household wealth took off during the pandemic
Under The Radar The Covid-19 pandemic caused a lot of pain and hardship, but new research shows it also left most Americans wealthier
By Justin Klawans, The Week US Published
-
Withdrawing benefits: 'war on work shy' or 'matter of fairness'?
Talking Point Jeremy Hunt to boost minimum wage while cracking down on claimants who refuse to look for work
By The Week Staff Published
-
Empty office buildings are blank slates to improve cities
Speed Read The pandemic kept people home and now city buildings are vacant
By Devika Rao Published
-
Inflation vs. deflation: which is worse for national economies?
Today's Big Question Lower prices may be good news for households but prolonged deflation is ‘terrible for the economy’
By The Week Staff Published
-
Sticky inflation and sluggish growth: why does UK economy continue to struggle?
Today's Big Question Food prices, Brexit and the Bank of England have been blamed for poor economic performance
By Chas Newkey-Burden Published