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Ulster Bank economist Richard Ramsey

There are more winners than losers in coronavirus support package for the self-employed, but it's not exactly an ideal solution

Richard Ramsey


Chancellor Rishi Sunak answers questions from the media via a videolink

Chancellor Rishi Sunak answers questions from the media via a videolink


Chancellor Rishi Sunak answers questions from the media via a videolink

Around 136,000 people in Northern Ireland, or 15% of the workforce, are classified as self-employed.

This employment category has been patiently waiting for support to match that for those working for employers.

Good news for many of them arrived at last yesterday with a package that in many ways matched last week's policy for employees.

However, it was disappointing news for some.

Self-employed workers who were working in 2018/19 and have submitted a tax return will be entitled to up to £2,500 per month.

If you were not working in 2018/19, perhaps because you were having a career break or were on maternity leave etc, you will receive nothing.

The income support will be based on 80% of the average of their last three years up to a maximum of annual profits of £50,000 per year. This encompasses around 95% of the self-employed population.

There are some losers, though. Those self-employed on very low earnings who don't submit a tax return will receive nothing.

Those higher earning self-employed will be hit. If you earn just below £50,000 you are entitled to £2,500 per month. Just above £50,000 and you get zero.

High earning jobs such as those in the legal profession (eg barristers), medical professions (eg locums, dentists) and property or IT entrepreneurs will lose out.

Those individuals who operated as companies and paid themselves dividends as opposed to earnings will also suffer as the support will not cover dividend payments.

Perhaps the biggest challenge for many self-employed will be the timing of the payment.

Those struggling today will have to wait another two months or so to receive income.

The Chancellor stated people would be paid by early June at the latest.

In the meantime, those struggling today will have to avail of a range of payment holidays, rundown savings, resort to more borrowing through credit cards or overdrafts, and welfare benefits.

Despite there being some losers, they are vastly outnumbered by winners, though.

This is good news for the self-employed and the Northern Ireland economy.

Richard Ramsey is chief economist at Ulster Bank

Belfast Telegraph