Thread by @lewis_goodall

SUNAK’S MEASURES FOR SELF EMPLOYED

Chancellor says Treasury will be publishing more details on the Coronavirus job retention scheme later this evening

CHANCELLOR: “I’m proud of what we’ve done so far but I know that many self employed people are deeply anxious about what measures are there for them...You have not been forgotten.”

MEASURES

Govt will pay self employed a taxable grant worth 80% of their average monthly profits of the last 3 years, up to £2500 a month. Scheme will be open for three months, possibly longer.

Well that’s it then. The Treasury is basically paying the nation’s wages.

Once again, despite it being deeply unfashionable in recent years, Sunak and the Treasury has basically adopted the Norwegian model.

CAVEATS

-open to anyone with trading profits of £50k
-available to anyone who makes maj of income from self employment
-only open to people with tax return in 2019
-Sunak says 95% of self employed will benefit

Self assessment income tax payments which were due in July won’t be due until next January.

Sunak hints that given self employed are now benefiting from direct government subsidy, the differences in NI contributions and tax status are more difficult to justify.

That’s what got Philip Hammond in trouble...

This is a generous package, potentially VERY generous in some areas but principal problem is timing. First payments in June. Given the economic carnage happening out there that is a very long way away

Chancellor says again that self employed in immediate financial need can apply for universal credit

But as I was reporting last night, the system is overwhelmed, just registering is proving a nightmare for many and then there’s the five week wait...

Also, 80% of profit vs earnings is going to be a problem in just keeping some of these businesses ticking over

Other problem- if you’re a relatively new business/you don’t make a profit, which is very common for relatively new businesses/people going it alone

There are also lots of “tax efficient” small businesses/sole traders who don’t make a profit on paper and therefore don’t pay tax. They won’t be able to get any money from this scheme and it’ll be a lot of people...

Some big holes there (in fairness, they are tough to fill in)

But shouldn’t lose sight of the big picture either. The Treasury will be paying the wages/subsidising the profits of a big proportion of the British workforce in a way which would have been unimaginable...2 weeks ago.

Famously, politics is the art of the possible and actually, this crisis (like all crises) is showing us that what’s possible is always a much bigger category of things than is generally said to be the case.