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Chancellor urged to extend support for self-employed

Government called on to extend the Self-employment Income Support Scheme 

After announcing that the Coronavirus Job Retention Scheme (CJRS) has been extended until the end of October, the Chancellor finds himself under increasing pressure to make similar arrangements for the millions of self-employed workers eligible for the Self-employment Income Support Scheme (SEISS). 

The CJRS - designed for employees and also available to limited company contractors - will run for an additional four months at least, with employers to start sharing the costs of this in August. However, at the time of writing there has been no further news on whether Rishi Sunak will continue to support the self-employed past June under the SEISS. 

This has, according to critics, highlighted an unfairness that must be addressed.

Under the SEISS, eligible self-employed workers will receive one taxable grant of up to £7,500 to cover lost income in March, April and May. With the Government only going as far to say that it is “keeping the scheme under review”, when asked if it will be continued, self-employed workers are currently left in limbo and unsure if they will be supported past this month. 

It’s said this lack of clarity could see millions of self-employed individuals return to work when it’s not safe. This point was raised by lobbying body for the self-employed, IPSE. With the JRS now extended, the association’s Director of Policy, Andy Chamberlain stressed the importance of continued help for the 2m self-employed workers who have already claimed via the SEISS. 

He said the Government “must not commit a glaring injustice by extending the employee Job Retention Scheme but pulling the rug from under the self-employed. Maintaining employee support while scrapping self-employed support also risks forcing freelancers back to work in unsafe conditions. It risks forcing them to make an awful choice between their health and their income.”

Mr Chamberlain added: “The self-employed aren’t just a vital and major part of the workforce: they are also the hard-working entrepreneurs we will need to kickstart the economy after Coronavirus. However, most of them cannot continue their work in the midst of this deadly pandemic and they are relying on Government support to get by.”

Meanwhile, the Chancellor has also been advised to urgently review the support available to the 710,000 freelancers and contractors in the UK working via their own limited companies. Similar to sole traders, many contractors find themselves in a precarious situation, but they currently fall between the cracks of the Government’s COVID-19 help. 

These independent workers qualify for the JRS, but the Government will pay 80% up to £2,500 per month on PAYE only - the scheme doesn’t acknowledge taxable dividends, which make up the vast majority of a contractor’s income. 

Qdos has regularly highlighted the need for the Chancellor to rethink the support available to contractors. 77% of more than 1000 independent workers we recently surveyed do not believe the JRS offers substantial help, while 28% said they do not have any savings to rely on should they lose work due to COVID-19.

So, after predicting a “significant recession” - alluding to a long road to economic recovery - it’s clear that Rishi Sunak has some serious thinking to do - both in terms of the length of time the Government extends the SEISS by (if at all) and the lack of COVID-19 support offered to hundreds of thousands of freelancers and contractors. 

With over 25 years’ experience, Qdos provides leading tax support and insurance for the self-employed. From tradesman insurance to professional indemnity policies and tax advice and representation, we offer a range of services that protect self-employed workers.

By:Benedict Smith

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