Self-employed measures: The reason you have to wait until June for payments

27 March 2020, 07:49 | Updated: 7 June 2023, 08:56

Self-employed measures: Why government is making you wait until June

The Chancellor unveiled measures to help self-employed people during the coronavirus crisis, but people will have to wait until June to get help. An economics expert explains the reason for the delay.

Chancellor Rishi Sunak promised £9billion in grants to pay 80% of the average profits for self-employed workers during the coronavirus lockdown, but they won't get the money for more than two months.

Duncan Weldon, the Economics correspondent for The Economist, said the measures were among the most generous in the world and explained why the self-employed's money won't come through until June.

He said: "I was speaking to small business people yesterday and there was a collective sigh when that wait was mentioned - a few using the kind of language I can't use on the radio.

"What the Treasury are saying is that it's just hard. It's frustrating to people trying to work out how they are going to get by until June. But it's administratively very difficult.

"The reason they can move so much faster for employees on a payroll is that those payrolls interact every month with HMRC, the tax authorities, they've got the details.

"They're not really making any payments. The whole UK approach, which is in common with the rest of Europe, is based around the best way to help people is to keep firms alive and pay them regular payments through their firms.

"The self-employed measures are different to a firm making its normal payments to staff and then getting money back from a Treasury. This is the government sending money out to people, which it doesn't do very often.

"If anyone has ever had a tax refund, it tends to come months later and in the form of a cheque. The government isn't set up to do this. They are trying to organise government payments to potentially millions of people and that's going to take some time."

Rishi Sunak announces self-employed income support scheme

Mr Weldon gave the Chancellor's reaction to the coronavirus outbreak a grade of a B, compared to a D for the United States.

Watch his full analysis at the top of the page.