Self-employed people whose jobs are impacted by the coronavirus outbreak will be eligible for a grant to cover 80% of their monthly profits up to £2500 a month.
Chancellor Rishi Sunak said the support package for self-employed people would cover 80% of average earnings over the past three years.
However, he warned the scheme may not be open for applications until early June.
For those struggling financially right now, self-employed people can access business interruption loans, and self-assessment income tax payments can be deferred until the end of January, Sunak said.
He added that self-employed people can now access Universal Credit in full.
Speaking at a Downing Street press conference on Thursday, the Chancellor said: “To support those who work for themselves, today I am announcing a new self-employed income support scheme.
“The government will pay self-employed people who have been adversely affected by the coronavirus a taxable grant worth 80% of their average monthly profits over the last three years, up to £2500 a month.”
He said HMRC are working on the scheme “urgently” and vowed it will be available “no later” than the beginning of June, with those eligible then able to receive payments backdated to March.
It will be open to anyone with trading profits of up to £50,000 and will only be available to those who make the majority of their income from self-employment.
The Chancellor said this is so only the “genuinely self-employed” benefit, adding: “To minimise fraud only those who are already in self-employment who have a tax return for 2019 will be able to apply.
“95% of people who are majority self-employed will benefit from this scheme.”
Those eligible will be contacted by HMRC and asked to apply, he said, and money paid into their bank accounts.
Anyone who missed January’s filing deadline will have four weeks to submit their tax return to ensure they don’t miss out on support.
More to follow