It’s proving ‘problematic’ to design a system of support for self-employed people impacted by the coronavirus outbreak

Historical tax returns do not provide an easy way to distinguish those who are 'deserving of support', says Chancellor

Designing a system of financial support for self-employed people impacted by the coronavirus (COVID-19) outbreak is ‘proving to be problematic’, the Chancellor Rishi Sunak has said today.

In Treasury Questions in the Commons today, and ahead of an Urgent Question on Self-employed: Financial Support, the Chancellor was asked if he could say more to reassure the self-employed whose anxiety has increased, because they have 'seen a ship sailing carrying others but not them.’

However, while the Chancellor said that the government is looking at the issue ‘in immense detail and at pace’, he added that it requires careful thought because there are genuine questions about practicality, fairness and delivery of any such support scheme –

‘The fact is that the universe of 5 million that we are dealing with contains such a wide variety of different people that we are unable to target support. That is the challenge in designing something that gets to the people who we want to help, while at the same time being affordable and not having to benefit absolutely everybody.’

NB – asked how practical is it to use historical tax data to try to impute a wage equivalent for the self-employed, the Chancellor said –

‘It is certainly possible to use those historical returns. They are a year and a half out of date, so they will be necessarily imperfect. They also do not provide an easy way to distinguish between those who are deserving of support and whose incomes are being affected by what is happening, and those who are much wealthier and whose incomes are potentially increasing currently, but they do provide a basis and a universe to look at.’

In terms of delivery, the Chancellor said that it is almost certainly going to be the case that the government will have to build a brand-new system to deliver any support, and that he will not commit to a specific timeframe until he has worked through the details. While this is ‘proving to be problematic’, he said, the government is ‘hard at work on it’.

For more information, see Topical Questions to the Treasury (24 March 2020) from Hansard.