The chancellor has announced that self-employed people will be able to claim a grant worth 80% of their average monthly profits – up to £2,500 a month.
Rishi Sunak said the support for those affected by the coronavirus crisis would be in place for at least three months and amounted to “one of the most generous packages in the world”.
The chancellor said it would deliver parity with his previously announced support for employed workers, and was “an unprecedented level of support for self-employed people”.
Unveiling the measures at a Downing Street news conference, the chancellor said the scheme was open to anyone with trading profits of up to £50,000.
But it will only be available to those who make the majority of their income from self-employment and who filed a tax return for 2019.
This would ensure only the “genuinely self-employed” benefit from the scheme and minimise the risk of fradusters applying for help, Mr Sunak added.
Anyone who missed the 31 January deadline for filing a tax return will now have four weeks to submit their return in order to not miss out on the scheme.
The chancellor said the support would help 95% of people who are majority self-employed, with Mr Sunak saying those who were not eligible had average earnings of more than £200,000.
Those who do qualify will be contacted by HMRC and the money will be paid directly into their bank accounts.
For those who are struggling right now, Mr Sunak said self-employed people can now access Universal Credit in full.
Other government measures will also allow them to access business interruption loans, while self-assessment income tax payments can be deferred until the end of January.
But the government’s package was criticised after the chancellor suggested the self-employed may have to wait until the beginning of June to access the income support scheme.
It was also suggested the help had already come too late for some self-employed, almost a week after help was announced for employed workers.
Labour’s shadow chancellor John McDonnell said: “My worry is that if people cannot get access to the scheme until June it will simply be too late for millions.
“People need support in the coming days and fortnight.
“Asking people to rely on Universal Credit when more than 130,000 people are queuing online will be worrying to many people.
“So there is a real risk that without support until June the self-employed will feel they have to keep working, putting their own and others’ health at risk.”
Last Friday, the chancellor promised to pay 80% of salary for staff employees who are kept on by their employer, covering wages of up to £2,500 a month.
Treasury officials are said to have been working around the clock this week to prepare a package for the self-employed – which the government has said is a more complex task than helping those on PAYE.
Mr Sunak has previously admitted the government “will not be able to protect every single job or save every single business” amid the economic crisis caused by the coronavirus pandemic.
Earlier on Thursday, Prime Minister Boris Johnson took part in a conference call with G20 leaders, in which the group promised a “transparent, robust, co-ordinated, large-scale and science-based global response in the spirit of solidarity”.
Following the virtual summit, Mr Johnson announced a further £210m in funding for international efforts to find a coronavirus vaccine.
The new money, which comes from the foreign aid budget, means the total amount of UK aid spent on the fight against COVID-19 now totals £544m.
Mr Johnson also called on governments around the world to help create a vaccine as quickly as possible and make it available to anyone who needs it.
The Coalition for Epidemic Preparedness Innovations, which the UK cash is being funnelled to, has said it requires £2bn in extra funding from countries to develop a vaccine.
“While our brilliant doctors and nurses fight coronavirus at home, this record British funding will help to find a vaccine for the entire world,” the prime minister said.
“UK medics and researchers are at the forefront of this pioneering work.
“My call to every G20 country and to governments around the world is to step up and help us defeat this virus.”