Coronavirus: Self-employed workers' bailout has 'sting in the tail'

Thursday, March 26th, 2020 10:19pm

This is, as far as the Treasury is concerned, the final part of the big jigsaw puzzle of measures to address the economic impact of COVID-19. 

It is a part which has been eagerly awaited by millions of workers - since the effective shutdown of vast parts of UK plc have affected the self-employed as much as many who work for companies.

And it is, at first glance, extraordinarily generous: the measures to support these workers will cost as much as £9bn over a period of three months.

It will involve large payouts being given to many workers - in certain cases some of the more well-off in the UK.

And while the Treasury insists this money will only be given to those who can prove their income has been affected by COVID-19, the workers will not simply have to sit at home doing nothing, as their employee counterparts who are furloughed will.

They will be able to work, earning themselves even more money in the coming months.

While there are limits to the generosity - it will not be given to anyone achieving annual profits above £50,000 in recent years - it is nonetheless a more comprehensive, expensive scheme than many had expected.

But for these workers there is nonetheless a sting in the tail.

The chancellor signalled that after the virus has passed, there will have to be serious conversations about the way the self-employed are treated in the tax system.

This underlines that for many years the Treasury has been at loggerheads with the ranks of self-employed.

It has wanted them to pay more taxes, arguing that they benefit from loopholes which employees cannot enjoy.

But at every turn they have been defeated by smart campaigners determined to fight the reforms.

Rishi Sunak hinted that one of the quid pro quos of this deal is the Treasury will redouble its efforts to clamp down on these loopholes in the coming years.

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He views this package as the last major element of his scheme to prevent unemployment in this country rocketing higher.

But it is quite conceivable that he might be forced to adjust the package in the coming weeks as it becomes clear which parts of society are still being left behind.

All eyes in the Treasury will now be on the early signs of what impact COVID-19 has on jobs, growth and incomes in the coming weeks.

Sky News

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