Search Magnifying Glass

COVID-19: Support package promised for self-employed

Chancellor to reveal support package for self-employed

The Chancellor of the Exchequer, Rishi Sunak, has said the Government is working on a COVID-19 support package for the self-employed, with a proposed amendment to the Coronavirus Bill indicating its potential details.

After facing criticism from self-employment experts and lobbying bodies, the Government has been urged to match the support it has promised employees, who will receive 80% of their salary up to £2,500 as businesses contend with the COVID-19 crisis. A tabled amendment to the Coronavirus Bill suggests self-employed workers could receive something similar, and states: “The scheme must make provision for payments to be made out of public funds to individuals who are (a) self-employed or (b) freelancers.” It then reveals details for plans to offer self-employed workers 80% of the individual’s monthly net earnings, averaged over the last three years, or £2,917 per month – whichever is lower. 

In the House of Commons, Mr Sunak didn’t confirm this or commit to a specific date upon which the Government would reveal its plans to help the UK’s 5m self-employed workers, but said it is “something that we have been looking at in intense detail over the past week.”  The Chancellor also said he has “been in dialogue with all the key stakeholder groups” and “rest assured” the Government “absolutely understand the situation that many self-employed people face at the moment.”

The news will be welcomed by the likes of IPSE, that recently condemned the Chancellor for leaving the self-employed “trailing far behind.” Director of Policy, Andy Chamberlain, said: “The Government has done nowhere near enough to support the self-employed. In fact, instead of supporting freelancers to help them keep their businesses going, it is pushing the self-employed into the benefits system. Worse, in the benefits system, the amount of money available will simply not be enough to cover many freelancers’ costs.”

Chamberlain wants the “Prime Minister and Chancellor to match the steps they have taken for employees and create a Temporary Income Protection Fund for the self-employed. This should give a temporary, targeted cash injection to the freelance businesses that are struggling most – a financial boost to make up for lost income and keep them afloat.”

IPSE has also started a petition, which has gained support from Stephen Fry and author, Philip Pullman. It has over 130,000 signatures. 

These calls come at a time when new research has shown the damaging effects COVID-19 is having on contractor hiring. Staffing association, APSCo, said placements have “fallen off a cliff”,  with 90% of recruiters stating that up to 50% of contractors on placement have already been terminated. According to the majority of recruiters, things don’t look much better for contractors who are still working, despite them having received the positive news last week that IR35 reform will be delayed. Around three quarters (76%) of recruitment consultants told APSCo they believe up to 50% of contractors will have their engagements brought to an end by 29th March. 

APSCo’s Chief Executive, Ann Swain, shared a similar view to IPSE. While welcoming the VAT deferral announcement, which will help cash flow for contractors and recruiters, Swain said she was “concerned” about the “thousands of self-employed and freelance contractors who have had their assignments terminated and who will not be protected and who, it seems, will have to rely on the benefits system.”

By Contractor Weekly

Comments

Add a comment

12 thoughts on “COVID-19: Support package promised for self-employed”

  1. Thomas Mcfarling

    That is good news. The only fly in the ointment is that for many who work in the film industry the last 3 months are the quiet months with many people earning next to nothing relying on March/April for the start of the work season. This could leave us falling through yet another crack.

  2. Rob Brown

    I wouldn’t get too excited, this is the same government who promised to listen to contractors concerns over IR35, yet issued next steps before the consultation had even finished. When the consultation finished it was ignored. They have shown total contempt for the contractor workforce so why do we expect anything more now? Let’s face it all they have offered is a vague promise to look at it. I’ve had enough of their vague promises.

  3. Aaron Mackay

    What happens to PAYE offshore workers that were paid off last week due to covid-19 and have no income coming in.
    I was paid off and told to look for another job.

  4. Tim Wilson

    Just for info as I assume many other contractors are in the same boat. I am contracting into the largest spectacle retailer in UK (should have gone to…). Last Thursday 19th March, as part of their stripping back of all costs, alll contractors were given 1 weeks notice; I finish this Friday 27th March.

  5. JR

    Good idea but why did IPSE use the US based Change.org which lacks any legal basis, rather than the Parliamentary petitions site?

  6. IR35 Victim

    It would have been easier to just implement a standard £250 per week for anyone who is not on JSA and not receiving a pension.

    It would be cheaper and easy implement.

  7. DRE

    Just listening to PMQ’s and it is amazing how many politicians from so many parties are so concerned about the self employed and freelancers, when 3 months ago none of them could give a stuff.

    • Martin Crompton

      They have probably changed their tune because they realise the country will be reliant on the flexible contingent workforce to get it going again. I hope they see sense and get rid of IR35 reform or at least come up with a fairer sensible system.

  8. Nelida Spalding

    What about contractors ALREADY out of work when COVID hit? JSA is £77 a week and stops for many after 6 months are up… what then? Any ideas appreciated.

  9. Nelida Spalding

    Help! Does anyone think Government help could apply to contractors who were already not working at the time COVID hit? I am on JSA but this is likely to stop next shortly due to time limits on JSA…

  10. Cherif MEDDOUR

    The scheme apparently covers 95% of contractors but that does not seem to include those who work via their own Ltd companies.

Leave a Reply

Your email address will not be published. Required fields are marked *