Wednesday 24 February 2021 12:31 pm

Chancellor 'to pay out £7,500 grants' for self-employed in Budget

The chancellor will pay out grants of up to £7,500 for self-employed workers in next week’s Budget, though he is considering dropping the scheme from May, according to reports.

The fourth round of grants handed out through the Self-Employment Income Support Scheme (SEISS) will cover February, March and April.

People who meet the criteria will be able to claim 80 per cent of average monthly profits up to a maximum of £2,500 a month, the Telegraph reported.

Read more: A catch-up strategy? How Government can give young Brits a boost in the Budget

Rishi Sunak had previously suggested that grants could be capped at 20 per cent of profits, rather than 80 per cent.

SEISS was drawn up last year to ensure that people who run their own businesses but were not eligible for other government support received help during the pandemic.

The programme has seen the Treasury spend more than £18bn on grants of up to 80 per cent of profits, up to £2,500-a-month, to self-employed workers affected by the coronavirus crisis. 

However, the grant scheme is at risk of being ditched or drastically scaled back from May, after the Prime Minister said he was “confident” that all restrictions would be lifted by late June.

More targeted measures could be adopted from May onwards for those that are unavailable to return to work when lockdown measures begin to lift.

Read more: Sunak’s Budget set to be a mix of tax rises and Covid cash giveaways

And while SEISS grants have proved a lifeline for many, millions of self-employed workers have argued they are still missing out on government support.

Parliament’s spending watchdog warned last month that “quirks in the tax system” meant a large portion of the self-employed workforce had received “not had a penny” from its various financial support schemes during the pandemic. 

A survey of more than 6,000 households released in January by the Office for National Statistics’ (ONS) found that only 24 per cent of self-employed people had received support from the Self-Employment Income Support Scheme (SEISS) up to October 2020.

The chancellor has faced growing calls to draw up emergency support for those left out from previous funding tranches in his spring Budget on 3 March next week.

Read more: Self-employed get tax reprieve as HMRC delays first late fee on unpaid self-assessment debt

Sunak is also understood to be preparing to extend the stamp duty holiday by three months until the end of June in an attempt to boost the property market after months of hibernation.

The extension to the policy, which covers sales of properties worth up to £500,000, could cost about £1bn, the Times reported.

The chancellor is widely expected to extend the furlough scheme, which is due to expire on 30 April 30. The measure alone could cost around £4bn a month.

The business rates holiday for the retail, hospitality and leisure sectors will also be extended at a cost of just under £1bn a month, along with the VAT cut for hospitality and tourism at an estimated cost of £200m a month.

It comes as the chancellor prepares to pull the UK out from its deepest slump in economic output for more than 300 years.

Figures released earlier this month by the Office for National Statistics showed the UK produced 9.9 per cent fewer goods and services last year than in 2019. The plunge was worse than the 1921 slump after the World War I and Spanish flu — and came close to a record contraction following the Great Frost of 1709.

Read more: Covid-19: Hospitalisation risk 64 per cent higher with British variant

Share:
Tags: