Over a million workers are not eligible to receive financial assistance from the Government’s COVID-19 support schemes, with over half of these employees being freelancers or contractors as only Pay as You Earn (PAYE) salary is considered to be covered by the schemes.
A report from the Treasury Select Committee named ‘Economic impact of coronavirus: Gaps in support’ outlines how 710,000 freelancers or contractors are not covered by the schemes.
Mel Stride, Conservative MP for Central Devon, chair of the Treasury Committee among other MPs is calling on Rishi Sunak, Chancellor of the Exchequer to stand by his promise in “doing whatever it takes” to protect all workers.
The schemes do not take in to account:
- New to employment or self-employed
- Self-employed people with annual profits exceeding £50,000
- Directors of limited companies
- Freelancers and thousands on short-term contracts
The Treasury Committee has urged the Government to find a solution, and said:
The Government must find a practical solution to supporting hundreds of thousands of limited company directors who are missing out on support because they pay themselves in dividends.
Seb Maley, CEO of Qdos, who offers insurance and tax advice for the self-employed said:
The Treasury Committee has sent a clear message to the Chancellor, who must plug this hole in the Coronavirus support and help 710,000 freelancers and contractors.
Both the self-employment support and the Job Retention scheme have rightly been extended, but hundreds of thousands of independent workers have been left stranded. This is despite many freelancers and contractors facing tremendous difficulties, as projects get cancelled and they face pressure from clients to reduce their rates.
With no clear end in sight to this crisis, it’s vital that the Government rethinks the support it offers freelancers and contractors, who will be instrumental in the UK’s economic recovery.
Mr Stride said:
The chancellor has said that he will do whatever it takes to support people and businesses from the economic impact of the pandemic.
Overall, he has acted at impressive scale and pace. However, the committee has identified well over a million people who – through no fault of their own – have lost livelihoods while being locked down and locked out of the main support programmes.
If it is to be fair and completely fulfil its promise of doing whatever it takes, the government should urgently enact our recommendations to help those who have fallen through the gaps.
Darius is the editor of HRreview. He has previously worked as a finance reporter for the Daily Express. He studied his journalism masters at Press Association Training and graduated from the University of York with a degree in History.