Self-employed workers earn thousands less than employees
Annual earnings for the selfemployed in Scarborough are thousands of pounds less than employedworkers’,newfigures have revealed.
The Association of Independent Professionals and the Self-Employed says a lack of supportduringthecoronavirus crisis has been “devastating” for self-employed people, after they were left waiting three months for government grants.
The latest HMRC figures for the 2017-18 tax year show the median income for a self-employed worker in Scarborough was £12,500.
The median is a measure of the average which takes the middle of a range of figures, to exclude very low or high earners.
For employed workers, the median income was £18,700 – £6,200, or 50%, more.
The figures mean that Scarborough’s selfemployed earn the lowest wages in Yorkshire and the Humber.
Under a government scheme announced in March to support the self-employed through the coronavirus crisis, those earning less than £50,000 per year could claim 80% of their monthly profits, up to a maximum of £2,500 per month. Three months’ worth of earnings were paid out in one lump sum – but workers had to wait until June for the payment.
An Institute of Fiscal Studies report found more than a quarter of self-employed people earning less than £50,000 would not have had enough savings and other liquid assets to cover three months of lost earnings – even if they had a partner who was also earning.
The Trades Union Congress has raised concerns about low wages for the self-employed, arguing some gig economy companies are using self-employment to get around paying the minimum wage to workers.
General secretary Frances O’Grady said: “While there are many who are happily selfemployed, there are too many workers who have been forced into sham self-employment in the gig economy. Companies must not be allowed to dodge their obligations, like paying the minimum wage and guaranteeing their workers the rights they deserve.”
A spokesman for the treasury said the self-employment income support scheme is one of the most generous in the world, and had paid out £7.7 billion to 2.6 million people as of June 28.
Too many workers who have been forced into sham self-employment”