Self-employed may get grants to cover lost income

Chancellor considering plans to help ‘forgotten’ workforce struggling to make ends meet

THE Treasury is considering plans to hand the country’s five million selfemployed workers extra financial protections amid the outbreak.

Rishi Sunak is being urged to adopt a model where the self-employed would get grants to cover lost earnings and the Government has said extra protections are on the table.

It comes after the Chancellor’s announcement that the state would provide unlimited sums to cover 80 per cent of an employee’s salary, up to £2,500, if their employer could not keep them on the payroll.

The pledge provided huge relief for fearful employees as Boris Johnson ordered bars, restaurants and leisure centres to close and the country faces recession.

But freelancers, who make up 15pc of the UK workforce and are thought to generate around £300 billion for the economy, say they have been left out.

Many are facing significant drops in their incomes because of the outbreak.

John Mcdonnell, the shadow chancellor, said denying additional support would force freelancers to go out and work instead of staying at home, putting other people’s lives at risk.

Andrew Chamberlain, of the Association of Independent Professionals and the Self-employed, a trade body, called on further protections and said freelancers were being left behind in the Government’s preparations for a major economic slowdown.

“The promised protections for employees are welcome, but the Government must go further to support self-employed people. We want to see contractors handed the same security with a dedicated income protection fund that would pay out grants.”

He added freelancers were already struggling across a range of sectors, with sports writers, events and project managers and musicians some of the hardest hit so far.

More than 2,000 musicians, including those from all the main symphony orchestras, bands for the leading West End musicals and the Ronnie Scott’s blues band, have written to the Chancellor asking for further support, demanding fair and equal treatment.

However, any struggling cash-inhand earners such as band musicians, cleaners or gardeners are unlikely to be protected by any scheme the Government puts in place, experts warned.

Heather Self, of accountants Blick Rothernberg, said it would mean some working through more casual arrangements would fall through the cracks.

“The system would have to work through an audit trail, so anyone who needs a grant but has not been filling out a self-assessment tax return will have to submit one, which could lead to questions being raised by the tax authority,” she said.

Among additional measures announced last week, Mr Sunak promised to make it easier for self-employed people to get access to universal credit, lowering the income floor and increasing the amount available by £1,000 – bringing the benefit in line with sick pay at £94.25 a week.

However, it typically takes at least five weeks for the first payments to come through, unless applicants take out an interest-free bridging loan that can be offset against the first payments.

Kara Gammel, 40, a freelance blogger and single mother from West Sussex, said she had already lost hundreds of pounds a week as the companies she works with have cancelled contracts. She said the protections available were not nearly enough to provide security for her and her six-year-old daughter.

“It’s a scary time and I’m worrying whether I am going to make any money over the next couple of months,” she said. “If you work full-time at a company you get sick pay, a pension and now the Government will pay your salary, but we get nothing like that. At the moment it just feels like self-employed people are being ignored.”