Self-employed workers can now apply for a grant worth 80 per cent of their average monthly profits to help them through the coronavirus pandemic.
Chancellor Rishi Sunak announced payments of up to £2,500 a month – to be paid in a single lump sum, although they will not begin to arrive until the start of June at the earliest.
Following his announcement of wage subsidies of 80 per cent for salaried employees last week, his message to the self-employed was: “You have not been forgotten.”
The announcements were broadly welcomed by many but there are fears that even these gestures won’t be enough.
Andrew Harding, Chief Executive, Management Accounting, at the Chartered Institute of Management Accountants, described the offer to help the self-employed as “an unprecedented measure that will provide 5 million people with some much-needed relief”.
It will take some time for the UK economy to recover, but preparing now will help us better navigate the future
But he added: “While we understand that the Government is navigating uncharted waters, we are concerned that delaying full support for the self-employed until beginning of June may be way too late for some.
“The self-employed make up 30 per cent of the UK workforce, making a valuable contribution to our economy – and we believe that more can be done to level the playing field for all workers.
“The Government should provide some much-needed relief by setting up a new quick-to-access “Coronavirus Loan Scheme”, akin to the Student Loan Scheme, to allow sole traders and the self-employed to solve their cashflow issues quickly and continue operating whilst other measures bed in.
“We should also extend business rates holiday to all SMEs to help as many struggling businesses as we can to preserve their cashflow and keep supply chains open, which would benefit our economy in the long-term.
“It will take some time for the UK economy to recover, but preparing now will help us better navigate the future.”
Questions many small business owners will now be asking following this announcement will be around how long it will take
Ian Wright, founder of British Business Energy, said the proposition “seems like a reassuring action to small businesses across the UK, however time will tell how this plays out over the next few weeks”.
He went on: “The spread of this virus across the globe has resulted in a threatening possibility of destroying millions of small businesses across the UK.
“Questions many small business owners will now be asking following this announcement will be around how long it will take to get these loans and how difficult the application process will be.
“Time is critical in the survival of small businesses across the UK, with businesses at risk of going under whilst they are waiting for government money. It is likely that small businesses such as local pubs and restaurants will feel the impact of the next few months for years to come, making it critical for the government to support them through this challenging time.
“The unfortunate reality is that some businesses are unlikely to recover from this. My hope is that the ones that do come through stronger than ever.”