Self-employed people hit by the coronavirus crisis will continue to receive Government support as new restrictions came into force.
Chancellor Rishi Sunak announced the Self Employed Income Support Scheme grant will be extended as he set out his winter plan in Parliament.
The initial lump sum payment will cover three months of profits from November to the end of January next year.
The taxable grant will be worth 20% of average monthly profits, up to a total of £1,875.
People will be able to apply for a second grant to cover February to the end of April.
Mr Sunak told MPs: “Throughout this crisis we have sought parity between employees and the self employed, providing more than £13billion of support to 2.6million self-employed small businesses.
“So I am extending the self-employed grant on similar terms and conditions as the Jobs Support Scheme.”
The move is a reduction in the size of grants for self-employed workers available earlier in the pandemic.
In the first round, eligible people got a taxable grant worth 80% of their average monthly profits over the last three financial years.
The grant – paid in a lump sum in June covering March, April and May – was capped at £2,500 a month, or £7,500 in total.
In the second round in August, eligible people got 70% of their average monthly profits, capped at £2,190 a month
The Chancellor told MPs: “The resurgence of the virus, and the measures we need to take in response, pose a threat to our fragile economic recovery.”
He said “we can’t save every business” and “we can’t save every job”.
The extension of the grant scheme comes as the Chancellor also unveiled a new package of measures to support businesses through the second wave of the pandemic.
Mr Sunak stood firm on his plan to wrap up the furlough scheme – where the Government underwrites the wages of workers – despite immense pressure from Labour and businesses groups.
Instead, he unveiled a new Jobs Support Scheme, where employees will work at least a third of their normal hours and the Treasury will top up the rest of their pay packet.
Workers will be paid for that work as normal, with the state and employers then increasing those wages to cover two-thirds of the pay they have lost by working reduced hours.
Mr Sunak also announced a 15% VAT cut for the hospitality and tourism sectors, and help for businesses in repaying government-backed loans.