Coronavirus: Self-employed bailout ‘problematic’

By Faisal Islam
Economics editor

Image source, Getty Images

The chancellor has promised help for the self-employed in "the coming days" after coming under repeated pressure to do "whatever it takes" to help them.

Rishi Sunak, however, repeatedly spelt out difficulties in applying the same terms as his recent bailout for staff.

He refused to commit to a precise date for help, saying there were issues about the fairness of any scheme.

Mr Sunak said addressing the issue was "incredibly complicated" and admitted that it was "proving problematic."

The Chancellor has spoken with groups representing workers and businesses to try and find a solution.

But he stressed it was not just a matter of looking at the tax returns of five million workers who have some self-employment income.

"Of course there are people whose incomes have been enormously impacted by what is going on currently, but there are also millions of people who are self-employed whose incomes may not have been impacted and, indeed, might be increasing.

"The ability of the government to distinguish between those people, based on tax returns that are over a year-and-a-half out of date, poses some very significant challenges in terms of fairness and affordability," he said at Treasury questions.


The "challenge" the chancellor told MPs was in "designing something that gets to the people who we want to help, while at the same time being affordable and not having to benefit absolutely everybody.

"That is proving to be problematic, but we are hard at work on it."

Mr Sunak went on to say that a self-employment scheme would require another "brand-new system" to deliver, and suggested that the priority would be "the scheme that we have set up for 90% of the workforce who are employed should be delivered first and quickly, and that is what we have committed to do, ideally by the end of April".

Acknowledging the anxiety of the self-employed, the chancellor pointed to help given on deferring VAT, interest-free loans, and changes to the tax credit and Universal Credit systems.

Answering a subsequent urgent question in the House, Mr Sunak's deputy, Steve Barclay, stressed that there were significantly fewer than five million likely claimants.

One million of that number were tax returns for less than £2,000, so mainly sources of additional income for a main job. Up to another million were already in receipt of Universal Credit.

Around half a million were older than the state pension age. Again he repeatedly suggested that some self-employed workers might even be earning more now than before.

The key problem, is that some control on numbers and against abuse of the employer scheme was introduced by insisting claims for 80% taxpayer wage subsidy can only be made by companies who register workers as "furloughed" with the HMRC, ie granted a formal leave of absence, but that doesn't exist with self employment.

Many MPs urged the government to move quickly with an imperfect scheme, even accepting that might give some money to those not in need.