Millions of self-employed workers in the UK whose trade has been affected by coronavirus will be able to apply for a second support grant from the government from Monday.
The second Self-Employment Income Support Scheme (SEISS) grant will pay up to £6,750, in what Chancellor Rishi Sunak said would be the final hand-out.
More than 3 million people are thought to be eligible for the second grant. The chancellor has said 95% of all self-employed workers were to be covered by the scheme.
The first grant in May saw £7.8bn in taxable grants claimed by 2.7 million people.
But millions of self-employed workers - especially PAYE freelancers and some operating on limited companies - have fallen through the cracks and are not able to apply for the government scheme.
Meanwhile, HM Revenue and Customs (HMRC) has said thousands were paid too much, but it will not be demanding repayment.
Some 15,000 payments - less than 0.6% of the total - were miscalculated in the first tranche of support, the tax authority said.
Applications for the first grant closed on 13 July 2020.
"The vast majority of grants were paid correctly, but in a very small number of cases, not all the information held on a tax return was taken into account when calculating eligibility and grants," said a spokesman for HMRC.
"Our top priority has been ensuring self-employed people receive grants quickly while protecting public money from deliberate fraudsters."
Labour warned that the workers will face a “cliff edge” when the payments run out this autumn.
Taxi drivers, plumbers and electricians are among those who will not see demand bounce back unless the economy picks up rapidly, the party said.
Shadow chancellor Anneliese Dodds said: “The Chancellor now plans to cut off support for every self-employed worker in the country from October – no matter whether they’re back at work or back under local lockdown. Just like his one-size-fits-all wind down of the furlough scheme, he’s pulling the plug at the worst possible time.
“Without flexible, targeted support beyond the autumn, hundreds of thousands more self-employed workers will lose out and Johnson’s jobs crisis will get much worse.”
Last week the Office for National Statistics found that there were around 238,000 fewer self-employed people in the most recent quarter.
The Association of Independent Professionals and the Self-Employed said that the government will need to consider a second extension if there is a second wave of Covid-19.
The association's hief executive Derek Cribb said: “It is now clear from the sharp drop in the number of self-employed in the UK that this vital part of the workforce has had nowhere near enough support compared to employees.
“Two-and-a-half million people claimed for SEISS between May and June – just half of the total five million self-employed in the UK. Now, as the number of self-employed has fallen sharply for the second quarter in a row, we are seeing the consequences.
“With the risk of a second wave looming, government must be ready to not only reopen SEISS, but also extend it to the desperately struggling forgotten self-employed.
"Historically, self-employed people have been essential for kickstarting the economy in recessions, but they cannot do this if they are driven out of business before they can play their part.”
What the second Self Employment Income Scheme offers
Self employed people can apply for a taxable grant worth 70% of average monthly trading profits which will be paid out in a single instalment covering three months of income.
Payments will be capped at £6,750 in total.
Who is eligible?
Businesses that have traded for all three years with profits no more than £50,000 are eligible for the scheme.
More than half of a claimant's income needs to come from self-employment.
Those not eligible based on their 2018 to 2019 Self Assessment tax return, will be assessed according to previous tax years going back to 2016/17.
People who earn freelance PAYE income, directors of limited companies or those operating through a trust and the newly self-employed will not be covered by the scheme.
Applicants will need to confirm their business has been affected by the virus on or after July 14 but they do not need to have taken the first grant to be eligible for the second.
Those receiving a grant can continue to work or start a new trade or take on other employment including voluntary work.
How do you apply?
Eligible applicants, whose business has been adversely affected on or after July 14, can make a claim for the second grant on or before October 19.
It does not need to be paid back but will be subject to income tax and National Insurance contributions.
Applicants must make the claim themselves through the HMRC and not use an agent or accountant to act on their behalf.
How is it worked out?
HMRC calculate the average trading profits over three years before calculating 70% of the monthly income.
Payments covering three months are paid within six days to claimants with a maximum payment capped at £6,750.