Chancellor’s pledge to pay 80% of wages does not help contractors

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Chancellor's pledge to pay 80% of wages does not focus on contractors

Chancellor of the Exchequer, Rishi Sunak announced on the 20/03/20 that HM Revenue & Customs (HMRC)  will cover 80 per cent of employees salaries, which will provide a maximum of £2,500 a month for companies to keep their staff on the payroll instead of letting them go due to COVID-19. However, people have stated these measures do not support freelancers and contractors.

Dave Chaplin is CEO and founder of contracting authority ContractorCalculator and is urging the Chancellor to support freelancers and contractors as COVID-19 will hit them hard.

Mr Chaplin said:

We are living and working in unchartered waters and whilst the Chancellor has pledged to support businesses and employees through this Covid crisis, he is forgetting the millions of freelancers and contractors who have also had their lives turned upside down overnight. Once again, the flexible workforce, who the Government purports to support, is being penalised. Mr Sunak now needs to recognise the impact Covid-19 is having on the freelance workforce and step in to reassure them that they will get proper financial support to see them through this unprecedented turmoil, helping them to swim through the tide and not sink without trace.

The spread of COVID-19 at the same time has also delayed the implementation of IR35 for a year to 2021. Stephen Barclay, chief treasury secretary announced this on 17/03/20 in the House of Commons that the legislation is to be pushed back from 6th April 2020 to 6th April 2021.

Frances O’Grady, Trades Union Congress (TUC) general secretary echoed Mr Chaplin’s words and said:

The Government took a big and important step last week with wage subsidies for employed workers.

But millions of self-employed workers – from the creative industries to construction – are still facing a collapse in their earnings. Many won’t be able to meet their basic living costs without further support. Ministers must urgently beef up support for the self-employed.

Large-scale wage subsidies are the best way to boost household finances, keep businesses running and help our economy bounce back after this crisis. All workers – both employed and self-employed – should have their wages protected.

However, this is still great news for numerous employees across the UK as Neil Carberry, chief executive of the Recruitment & Employment Confederation (REC) said:

The Chancellor’s announcement is the big action the REC and many other business organisations has been working hard to achieve last week. The key thing now is to make sure the money can flow quickly and simply to the businesses that need it. Cash flow support, VAT deferment and wage payments are the exact radical measures that will help. The most important thing now is to implement these changes with great speed. Looking ahead, recruitment professionals have a pivotal role to play in helping people get jobs in sectors where they are most needed at this time such as healthcare, logistics and the food sector.

Peter Briffett, CEO of the income-streaming provider Wagestream said:

This seismic announcement by the Chancellor is incredible news for millions of workers, many of whom are fearing for their jobs or have already lost them.

Promising to pay 80 per cent of workers’ salaries means that businesses no longer need to lay off entire workforces.

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