The next self-employed grant will be capped at £7,500 per person, based on average trading profits.
>See also: Self-employed Income Support Scheme (SEISS) to be doubled for November
The self-employed grant is taxable income and also subject to National Insurance contributions.
The government has already announced there will be a fourth grant covering February to April 2021, the level of which has yet to be announced.
Universal Credit U-turn
The government has also extended the suspension of the Minimum Income Floor, a rule within the universal credit system which capped payments to self-employed workers to the equivalent of what you’re given if you are working full-time on minimum wage but still claiming.
Who’s still excluded from the self-employed grant
However, swathes of the self-employed – calculated to be 690,000 people – are still excluded from support, either because they are newly self-employed, or they are company directors, or they more than £50,000 through self-employment, and people who earned less than half their income being self-employed.
Derek Cribb, chief executive of the Association of Independent Professionals and the Self-Employed (IPSE), told the Financial Times there were still “devastating gaps” in SEISS.
For example, the Institute for Fiscal Studies estimated that one in five people for whom self-employment made up at least half their income were excluded from the Self-Employed Income Support Scheme (SEISS).
That rose to 38 per cent for those with some form of self-employed income but less than half.
Paul Johnson, head of the Institute for Fiscal Studies, told the Times: “We know that the self-employment scheme has overcompensated many while leaving others completely uncompensated. To continue with a scheme like that, which was dreamt up at speed, with no serious attempt to address its flaws is quite surprising.”
Tom Waters, a senior research economist at the IFS, told the Financial Times that although it would be difficult to bail out all self-employed people “the ineligibility of others — those who get less than half their income from self-employment, or who have profits over £50,000 — is a specific policy choice”.
Sunak extends furlough to whole of UK until March 2021