Self-employed workers will soon be able to claim 40 per cent of their previous earnings after Chancellor Rishi Sunak announced plans to double the Self-Employment Income Support Scheme grant today.
While the move offers much needed relief to those already eligible to claim income support, experts say a third of those who work for themselves still don’t qualify for any financial aid.
The maximum payout for those who are eligible will increase from £1,875 to £3,750 from next month, costing the Treasury a further £3.1billion through to January.
A further grant will follow covering February to April, said Mr Sunak.
Chancellor Rishi Sunak has today announced plans to double the SEISS grant amount
Speaking to the House of Commons earlier today he said: ‘I’ve always said that we must be ready to adapt our financial support as the situation evolves, and that is what we are doing today.
‘These changes mean that our support will reach many more people and protect many more jobs.’
But critics were quick to point out that many people will continue to miss out.
Federation of Small Businesses nation chair Mike Cherry said: ‘At a time of immense struggle for many small businesses, these interventions will help to protect jobs, businesses and livelihoods.
‘The upgraded support for the self-employed is vital to helping those individuals, but as with all previous support packages, there are still many who have been left behind.
‘Those excluded from income support throughout this crisis, especially company directors and those newly self-employed, are now facing a significant depression in trade caused by these new restrictions and in many cases have no business at all.
‘They deserve to be part of this package of new support but have once again been ignored, the Chancellor should do all he can to address these shortcomings which are urgently needed.’
The Chancellor has previously stated the scheme would cover 95 per cent of the country’s self-employed workforce but various associations and trade organisations have disputed the claim.
The Association of Independent Professionals and the Self-Employed said it welcomes the SEISS development but significant issues remain.
Chief executive Derek Cribb said: ‘There are still deep structural problems with the scheme, which the government must urgently address.
‘A third of the self-employed – including sole directors of limited companies and freelancers – are still completely excluded from SEISS. This is an enormous omission and it is deeply troubling that the government has not addressed this.’
The gaps in the support have already led to the biggest drop in the number of self-employed on record – over 250,000 since the beginning of the year, according to IPSE.
Not-for-profit group ExcludedUK estimates that more than three million UK workers have been unable to get any help during the crisis.
This includes the newly self-employed, businesses with trading profits of more than £50,000, limited company directors, PAYE freelancers and many more.
Cribb addded: ‘With large parts of the country locking down again, this is only set to worsen as many forgotten freelancers face financial devastation. Government must act now and open up SEISS or other targeted support to these groups.’
Furlough changes confirmed
Other announcements made today include an expansion of the Job Support Scheme and new grants for businesses in high-alert regions which have had to restrict or completely halt trading because of restrictions.
Changes to the furlough scheme for employed workers will see the minimum requirement of employers paying 55 per cent of wages for a third of hours dropped.
Confirming the Winter Economic Plan announcement made last month, Mr Sunak said employers will have to pay for a minimum of 20 per cent of usual hours worked, and 5 per cent of hours not worked.
The government will now fund 62 per cent of the wages for hours not worked, more than doubling the maximum payment to £1,541.75 a month.
In the most generous cases, the taxpayer will go from funding 22 percent of wages to just under half.