Self-employed support increased but freelancers and contractors overlooked again

Prime Minister unveils further job support but limited company directors are left behind

The Prime Minister followed up the news that the full furlough scheme will be extended throughout November by announcing that millions of self-employed workers are able to claim 80% of their trading profits for this period to help people navigate a second lockdown in England.

This means sole traders eligible for the Self-Employment Income Support Scheme (SEISS) will receive double the amount of Government aid (up to 80% from 40%), which increases the grant available to £5,160 for November to January. This marks a 15% increase on the amount originally allocated.

For the reported 2.6m self-employed people who have already claimed via the SEISS this is a welcome development and, as stated by the Chancellor, will see the £13.7 billion already paid out to help sole traders increase significantly.

Meanwhile, the nearly 10m employees placed on furlough so far also find their jobs and income protected for another month, with the Government to increase its salary contribution back up to 80% for November.

Alongside this, the deadline for applications to Government-backed loan schemes such as the Bounce Back Loan and the Coronavirus Business Interruption Loan Scheme have both been extended until 31st January.

But as important as these measures are likely to be for many self-employed and employed workers, the glaring gaps in the Coronavirus support still remain.

Freelancers and contractors cast aside by the Government

As many as 3m freelancers, contractors and small business owners who operate their own limited company have been overlooked yet again. Ineligible for the SEISS and only able to count PAYE earnings towards the CJRS, independent workers continue to fall between the cracks in the Government’s support.

Our CEO, Seb Maley, made this clear to the FT Adviser, describing the Prime Minister’s decision to leave contractors behind as a “deliberate, short-sighted and callous move”.

Seb added: “The irony, of course, is that it will be these workers who the Government needs most to kickstart the economy. It’s vital, therefore, that the Prime Minister tailors the support available to this key sector of the workforce before it’s too late.”

One third of all self-employed all but ignored

Limited company directors aren’t the only ones who find themselves overlooked in the extension to the SEISS and CJRS. Those relatively new to self-employment have also been largely ignored, meaning that approximately one third of the UK’s independent workforce is unable to claim significant state support.

This is something that Derek Cribb, CEO of The Association of Independent Professionals and the Self-Employed (IPSE), pointed out:

“It is deeply troubling that the Government has still not fixed the devastating gaps in SEISS, despite urgent recommendations from the Treasury Select Committee. After so many calls to resolve the problems, it now looks as if the Government is wilfully ignoring a third of the self-employed.”

“The first lockdown drastically undermined self-employed incomes, and the gaps in Government support led to the biggest drop in self-employed numbers on record. Unless Government wakes up to the problem and supports all the self-employed, the second lockdown will accelerate the decline and hollow out swathes of this vital sector.”

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