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Sunak’s £4.6bn package ignores gaps in COVID-19 support

New COVID-19 support announced by the Chancellor may “not be enough to save many firms”

The UK population is being asked to stay at home once more after the Prime Minister announced a third COVID-19 lockdown in England, with Scotland, Wales and Northern Ireland also under similar restrictions.  

The measures, which will see the UK plunged into a lockdown with rules similar to those in March last year, come amid a surge in Coronavirus cases and is expected to last until at least mid-February.

In light of the latest lockdown, Chancellor Rishi Sunak announced a new business support package worth £4.6 billion in grants. 

It includes a one-off top-up grant for businesses in the retail, hospitality and leisure sectors of up to £9,000 per property. £594 million has been pledged to businesses in other sectors impacted by the new restrictions.

COVID-19 support package needed “for the whole of 2021”

Speaking on 5th January, Sunak said: “Throughout the pandemic, we’ve taken swift action to protect lives and livelihoods and today we’re announcing a further cash injection to support businesses and jobs until the spring.

“This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.”

However, the new package fails to address the gaps in support and many professional bodies are now extremely concerned at the number of businesses, including freelancers, contractors and the self-employed, that may not survive.

Adam Marshall, Director General for the British Chamber of Commerce, said: “While this immediate cash flow support for business is welcome, it is not going to be enough to save many firms. We need to see a clear support package for the whole of 2021, not just another incremental intervention.  

“The government must move away from this drip-feed approach and set out a long-term plan that allows all businesses of all shapes and sizes to plan, and ultimately survive.” 

Lockdown could see “spring cliff-edge”

“Many smaller firms won’t qualify for the full headline amounts set out in the Chancellor’s statement, and will be left struggling to see how this new top-up grant will help them out of their cashflow problems.  

“Support must be sufficient to cover not just those on the front line of retail, hospitality and leisure, but also firms in supply chains and wider business communities who are also feeling the devastating impacts of these restrictions.”

The Institute of Directors (IOD) has warned the Chancellor that businesses could face a “spring cliff-edge” when the “furlough scheme and other support measures unwind”, if there is no long-term strategy.

This latest announcement is also likely to have knocked business confidence further, with many companies putting projects on hold and becoming reluctant to invest because of COVID-19 uncertainty. 

It could not only affect freelancers and contractors who provide specialist skills to businesses, but also self-employed tradespeople – many of whom have received little to no financial support from the government either.

Time for government to do the “right thing”

Research conducted by Rhino Trade Insurance prior to the third lockdown being imposed revealed that nearly a quarter (24%) of self-employed tradespeople were not confident their business could survive. Reflecting on this, Managing Director Troy Stevens said: “Another lockdown is the last thing tradespeople want, particularly those who work for themselves – after all, when you’re self-employed, if you aren’t working, you aren’t earning.”

Seb Maley, CEO at Qdos, also commented on the new measures: “This lockdown could force millions of small businesses to close for good if the government doesn’t step in and provide the support they desperately need. Come March, millions will have spent an entire year battling the pandemic without any financial help.

“These sole traders and directors of limited companies have been deliberately ignored, despite the Chancellor promising that nobody would be left behind and despite the government having been provided with solutions – the Director’s Income Support Scheme being one. 

“After the Prime Minister’s announcement, it’s time the government did the right thing and rolled out tailored support for freelancers, contractors and small business owners who still, even now – after nearly a year – are being tragically overlooked.”

By Contractor Weekly

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15 thoughts on “Sunak’s £4.6bn package ignores gaps in COVID-19 support”

  1. Gary Andrews

    The 3 million unsupported left behind have been deliberately ignored long enough. We need to collectively look at ways to force the liars Sunak and Johnson to the table.

    All the more infuriating as 2019s usual tax bills come rolling in compounded by Covid deferred 2018 arrears.

    This government just DOES NOT PLAN and WILL NOT ACT! It only temporarily reacts to an issue if it’s bleeding out over the floor in front of the news cameras.

  2. Glen Whelan

    Add the proposed IR35 off-payroll into the mix and you have contractors closing shop. Where is the money going instead? It seems in my industry that the offshore firms are cleaning up and the expected taxes are not going to be collected. Meanwhile, the contractor is facing paying employers and employee NI with zero rights or benefits.

  3. A non

    Absolute joke of a website – jumps around every few seconds. Gave up reading it after first paragraph

  4. Graham

    Here we go again.
    People who have traded as directors of Ltd. companies now claiming that they should be treated as self-employed people working outside a Ltd.
    There are plenty of benefits and support for companies. Use those. Or furlough yourself and claim the appropriate percentage of what you received as PAYE.
    These people are doing serious damage to the cause of real contractors in the battle against IR35. They are effectively validating HMRC’s position.

    • Gary Andrews

      Yes here we go again, another HMRC sock puppet looking to reduce a complex issue for real people to a simple “pay your share you tax cheats” narrative.

      This article is about JRS support and how others have been supported bar a deliberate unfavoured few.
      Contractors are the new immigrants!

  5. Ying Tong

    Governments don’t have money. This is our money they’re printing and spraying. They maxed out the borrowing last year and there has to be a limit on how far they can max it out again this year. As Merv King warned two days ago, there is a real risk of another financial collapse and its our money again standing behind all those government guarantees. If we don’t get this under control we are looking at defaults on sovereign debt and if that starts happening all bets are off. Our worries would then be about the basics such as getting enough food on the table from day to day.

    • Gary Andrews

      @YingTong – Talking out of your arse again. Your national populism is all about using irrelevant quotes, slogans and scapegoats to fool the man in the street, King is right to warn of a global financial crisis but hardly clairvoyant or relevant here. On a national level it’s your government that’s tanked the economy, sprayed our money up the wall and hardy made us food secure.

      Contractors tax bills this year, last year and (for me and many others) every year this century haved dwarfed any potential support but could keep us afloat in a forced lockdown.

      It is always going to be a net payment to the exchequer this year unlike most workers on furlough but it’s the tax bills that are killing us. Why are we not supported?
      Political corruption, cronyism and lobbyist opportunism!

      • Ying Tong

        I suspect many people will be struggling to understand why you persist with contracting when it has been so consistently ruinous for you. Would permanent employment not be more suitable for your planning? With a nice pension at the end.

        • Gary Andrews

          Ahh the “just retrain as a bus driver” response.
          Always the simple answer to a complex problem.
          Politics of the pub drunk, and now the cabinet.

          • Ying Tong

            I did not suggest bus driver, not least I have no way of telling whether you would have the necessary competencies for the role. It occurs to me that a one man operation service will self evidently require some interaction with the general public. This may dictate your introduction in a two man service with the prospect of promotion to sole responsibility later in your career. In this way you could progress towards the enhanced pension eligibility which is important to you.

          • Gary Andrews

            The bus driver example was flippant but you’re deliberately misconstruing the situation again while having zero experience of the industry. Running a small business hasn’t been consistently ruinous as you put it. In fact most of us were doing just fine before this f*ck business government came to power and shat all over us.

            Good contractors have many competencies and need to be adaptable but your assumptions seem to come from a view point of ignorance and privilege.
            Are you Jacob Ree-Mogg?

          • Ying Tong

            Rees-Mogg is a very fine fellow, I’m told. His grandfather was editor of The Times, as you may know. He has done very well. Do you know him? You are very lucky. I do not think he travels much by bus. He keeps several decent motor cars, including a rather nice Shadow II I believe, although he does not himself drive. He has a chap. I really must press on but it is always useful to hear your views. You should continue to practice driving your bus as it is an important duty and I shall ask you some questions about it next time to see if you are making progress. It is vital to ensure people can be transported to work as we try to rebuild our country after this dreadful fever thing. We must all do our bit.

          • Gary Andrews

            Ho ho, your cluelessnes makes perfect sense now.
            Yes I know Mogg via an aquaintance, fluent in Latin but can’t wire a plug, thinks the Old Testament is a science manual.

            I doff my cap to him and his late pa. With leaders of that quaility I’m certain our country will be back to the top of the G7 in no time.
            Enjoy your trust fund “businessman”.

  6. S ... t Storm

    Left behind and forgotten that’s freelancers for 2020

    Furlough needs to be stopped if the job has not restarted by now it doesn’t exist

    My company is winding down let the staff go no one on furlough anymore

    Sorry for them but I have lost a fortune trying to keep them employed

    2021 the year if redundancies

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