Relief for 5 million on furlough, and 3 million self-employed people – but not everyone will get help

Relief for 5 million on furlough, and 3 million self-employed people – but not everyone will get help: Sarah Coles from Hargreaves Lansdown comments.

Main budget points:
  • 7 million people were furloughed at the end of January.
  • The furlough scheme has been extended to September. It will be tapered from July.
  • The third self-employment grant paid out to 2.2 million people. The inclusion of people who completed their first self-assessment tax return this year means another 600,000 will be eligible.
  • The fourth self-employment grant will stay at the current level February-April – offering up to 80% of trading profits or £7,500 over three months. For the fifth grant, people whose turnover has fallen by 30% or more will continue to get 80% of average profits, those whose turnover has fallen less than 30% will receive a 30% grant.
Sarah Coles, personal finance analyst, Hargreaves Lansdown, commented:

“The government has learned how much damage can be done by prioritising hope over experience. After the tapering of the furlough scheme in the autumn sparked record redundancies, it’s being much more cautious this time round. It needs to be flexible too.

“This will come as a huge relief to the millions of people still utterly reliant on these schemes to make ends meet.

“The extension of the self-employment grant to those who have just submitted their first tax return will come as a huge relief. The last year has been an incredible struggle in impossible circumstances without government support beyond Universal Credit. They will finally get more of the help they so desperately need.

“However, this doesn’t help all of those excluded from government schemes. There’s no respite for self-employed people with profits of over £50,000 or who receive less than 50% of their income from self-employment, who will continue to battle on. It must seem even more unjust that the scheme is scooping up hundreds of thousands more people, and still leaving them behind.

“Both these schemes need to be flexible enough to adapt. When the government announced its roadmap, it made it clear that none of the dates were set in stone, so it’s vital the Chancellor adopts a similar level of flexibility. Last time we had an 11th hour climbdown, when redundancies were already in train. This time, we need the scheme to adapt quickly and offer clarity, to help support as many people to stay in work as possible.”

 

The announcements

Furlough

The scheme will continue at its current level until the end of June, which is 9 days after the date the government has pencilled in for the economy opening up again.

It will pay 80% of wages for those involved in the scheme, up to £2,500 a month.

Then, the government will start tapering the scheme, to cover 70% of wages in July and 60% in August and September (with firms topping up to 80%).

The self-employment grants

The fourth self-employment grant will stay at the current level February-April – offering up to 80% of trading profits or £7,500 over three months.

For the fifth grant, people whose turnover has fallen by 30% or more will continue to get 80% of average profits, those whose turnover has fallen less than 30% will receive a 30% grant.

 

Kindly shared by Hargreaves Lansdown

Main article photo courtesy of Pixabay