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Boris Johnson: Self-employed to face ‘a long, cold and hungry winter’ under 3-tier system | Personal Finance | Finance

Boris Johnson has introduced a three-tier system for managing local lockdowns as the prospect of a nationwide lockdown looms. The introduction of these new rules coincide with additional support from Rishi Sunak to keep the employed afloat but analysis of new data from the Office for National Statistics (ONS) shows the self-employed are still struggling and may continue to do so.

According the latest ONS figures, the number of self-employed people in the UK dropped by 240,000 in the third quarter of 2020.

On this, Simon McVicker, the director of public affairs, policy and communications at, expressed little surprise but warned of dire consequences if action is not taken now: “These figures are not surprising. Self-employed people have been unfairly left behind when it comes to financial support.

“It is no wonder they are leaving the sector to find permanent roles.

“The Prime Minister’s announcement of the new the three-tier system will see self-employed people in local lockdowns receive only 20 per cent of their earnings, while employees receive two thirds.

READ MORE: Universal Credit: DWP issue new guidance on debt repayments 

“ONS data from late August reveals that one in six firms are trading insolvently – that’s horrendous.

“Based on that, I estimate that around 250,000 small businesses could close in the next two to three months. That could amount to at least another one to two million people unemployed.

“There is a real problem stacking up here.

“The Treasury has been throwing money at the problem in the hope of defying those dire predictions, but it seems like it doesn’t understand how the economy works and where the freelancers and the self-employed fit into the wider enterprise community.”

In late September, it was confirmed the Self-Employment Income Support Scheme (SEISS) would be extended into 2021, albeit with reduced levels of support.

The extension will provide two additional grants and will last for six months, from November 2020 to April 2021.

These grants will be paid in lump sum instalments but will be a lot less than previously issued grants.

The new taxable grants will cover 20 percent of average monthly trading profits, paid out in a single instalment which will be capped at £1,875 in total.

For comparison, it is currently possible to receive a grant worth 70 percent of average monthly trading profits, capped at £6,570 in total.

Given the drastic reduction, eligible claimants will likely want to take advantage of the more generous grants available but a deadline for them is quickly approaching.

So long as claimants are eligible, they must make a claim for this 70 percent grant on or before October 19.

In order to be eligible for the grant extension, self-employed individuals, which includes members of partnerships, must:

  • currently be eligible for SEISS (although they do not have to have claimed the previous grants)
  • declare that they are currently actively trading and intend to continue to trade
  • declare that they are impacted by reduced demand due to coronavirus in the qualifying period (the qualifying period for the grant extension is between November 1 and the date of claim)

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