Mr Sunak said the steps taken so far were “already making a difference” but it was right to go further “in the economic fight against the coronavirus”.
Self-employed people will be able to apply for a grant worth 80% of their average monthly profits over the last three years, up to £2,500 a month.
At least half their income needs to have come from self-employment as registered on the 2018-19 tax return filed in January – anyone who missed the filing deadline has four weeks from now to get it done and still qualify.
The scheme is open to those who earn under £50,000 a year – up to 3.8 million of the 5 million people registered as self-employed.
Unlike the employee scheme, the self-employed can continue to work as they receive support.
The money, backdated to March, will arrive directly into people’s banks accounts from HMRC, but not until June.
The grants will be taxable, and will need to be declared on tax returns by January 2022.
Company owners who pay themselves a dividend are not covered.
The scheme does not cover people who only became self-employed very recently – the chancellor said they would have to look to the benefits system for support.
Coming up with a workable scheme had been “difficult”, he continued, because the self-employed were a “diverse population” and some of them earned a great deal.
But in all, the “fair, targeted and deliverable” plan would help 95% of people who earn most of their income via self-employment.
“We have not left you behind, we all stand together,” he added.
Communities Secretary Robert Jenrick later told the BBC’s Question Time that even where self-employed workers were unable to provide full financial records going back three years, the government was urging people to “give us what they’ve got and we will work through it with HMRC to see if there’s a way to support you”.
The Federation of Small Business, which represents many self-employed workers, welcomed the intervention, saying: “Although the deal is not perfect, the government has moved a very long way today.”
But Labour’s shadow chancellor John McDonnell said he was worried the money would come “too late for millions”.
“People need support in the coming days and fortnight… there is a real risk that without support until June the self-employed will feel they have to keep working, putting their own and others’ health at risk.”
Labour leader, Jeremy Corbyn, said the government had been too slow to recognise the severity of the crisis.
Torsten Bell, from think tank the Resolution Foundation, said the very significant package stood in “stark contrast” to the “much less generous” support being given to employees who lose their jobs or see their hours cut during the crisis.
The Coronavirus Self-Employment Income Support scheme is another extraordinary, multi-billion pound support, reflecting the brutal economic impact of a shutdown designed to keep the pandemic in check.
In recent days, Treasury ministers appeared to be trying to dampen down expectations, telling MPs it was problematic to establish a fair scheme, and the employee job retention scheme would be the logistical priority.
The government wants to set up the scheme to keep employed jobs as the priority first, so the banks will need to be relied on to support many of the self-employed with overdrafts to tide them over until the grant goes into their bank accounts in about 10 weeks’ time.
The sting in the tail? The chancellor said he can no longer justify, after things get back to normal, that self-employed people pay less tax than the employed. But that is for another day.
In the UK, more than 11,600 people have now tested positive for coronavirus – although the actual number of cases is likely to be far higher.
The peak of demand for intensive care was expected to come in two to three weeks, but speaking alongside the chancellor at Thursday’s briefing, England’s deputy chief medical officer, Dr Jenny Harries, refused to be drawn on any predictions.
She said the UK was “only just starting to see a bite in the interventions – the social distancing – that have been put into place”, but things appeared to be “starting to move in the right direction”.
The government has imposed strict controls on everyday life designed to slow the spread of the disease.
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