Ceiling for self-employed coronavirus support may be dropped to £30,000 #SmallBiz - The Entrepreneurial Way with A.I.


Wednesday, May 6, 2020

Ceiling for self-employed coronavirus support may be dropped to £30,000 #SmallBiz

Originally written by Timothy Adler on Small Business

The Treasury is thinking about cutting its ceiling for self-employed coronavirus support to £30,000 before its scheme has even launched yet.

HMRC has begun writing to the self-employed, telling them if they are eligible for the Self-Employed Income Support Scheme and encouraging them to apply.

The self-employed coronavirus support scheme is set to open on May 13, having been brought forward from the June start previously talked about.

Under the current scheme, freelancers and the self-employed can apply for a one-off payment of up to £7,500 covering three months. This is based at looking at your tax returns for the past three years and then averaging your monthly income. Only freelancers and the self-employed who have been earning up to £50,000 a year can apply for the self-employed coronavirus income support scheme.

>See also: Self-employed Income Support Scheme what it means for you

However, according to the Times, the Treasury is already thinking about slashing that £50,000 ceiling to £30,000 going forward.

The Treasury has already said the SEISS will be extended.

Plummeting unemployment

However, HMRC officials are trying to figure out ways to wean workers off government support packages such as the SEISS and its furlough scheme without creating plummeting unemployment.

Chancellor Rishi Sunak will announce plans next week to wind down the Coronavirus Job Retention Scheme (CJRS) from July as part of an attempt to get people back to work as lockdown is eased.

About 6.3m people are currently being paid not to work while on furlough. This has already cost the Treasury £8bn and will ultimately cost more than £40bn, a situation the chancellor says is unsustainable.

A survey conducted by the CIPD, the body for HR professionals, suggested that over half of employees who have been furloughed would have been made redundant if the scheme wasn’t there.

“People are addicted to the scheme,” a senior government source told the newspaper. “We’re not talking about a cliff-edge, but we have to get people back to work.”

One idea being considered, according to the Evening Standard, is that the furlough subsidy will be reduced from 80 per cent to 60 per cent.

Other options could include allowing part-time furloughing so that staff can do some work while receiving government support.

Another idea being talked about is winding down the scheme gradually, starting with workers in small shops, with staff in hotels and restaurants being the last to be taken off support.

However, the fear is that many of those in retail will find they don’t have a job to go back to once the coronavirus job retention scheme is yanked.

Richard Lim, chief executive of Retail Economics, told the Telegraph he expects retail to lose 20 per cent of store staff – about 150,000 people – over the next decade.

How to wean workers off government furlough support is not just a problem in Britain. According to Bloomberg, more than 40m workers are now being paid under furlough schemes across Europe’s six largest economies.

Further reading

Treasury bails out small businesses in co-working spaces


Ceiling for self-employed coronavirus support may be dropped to £30,000

via https://ift.tt/2Jn9P8X by Timothy Adler, Khareem Sudlow