By Ryan Barnett
Labour Business Executive Committee Member
The Corona Virus has had a huge impact on the global economy. There are 5 million self-employed in the UK who will need both income and business support. They provide skills across all industries and sectors in the UK, contributing £305 Billion to the UK economy last year.
Several sectors are affected more than others, contractors in the arts and working in events felt the effects almost immediately. Tourism, construction and those selling goods came next. 2 million Limited companies – from publicans to plumbers to dentists, some of our most vibrant businesses and important employers have been forced to close, uncertain as to what comes next.
The Government have outlined a package of support for the economy, with many measures targeted at the self-employed. Primarily, the postponement of IR35 for at least a year, which was causing increased uncertainty amongst freelancers. They have announced the SEIS scheme for sole traders, after extensive consultation with IPSE.
This is now open, thankfully ahead of schedule. Limited companies, those who have become self-employed, anyone who is taken a period out of work for care, maternity or adoption and those who earn more than the £50,000 cap have been left out of the scheme.
IPSE’s recent research into the effect on the self-employed paints a stark picture (survey responses taken in April):
- Lowest business and economic confidence on record, which has fallen at the fastest ever rate (data dates to 2014)
- 2/3 of self-employed have seen a decrease in work
- 9/10 are worried about the virus affecting their business
- 45% fear not being able to afford basic living expenses – rent and bills
- 2/3 have either no savings or only 3 months of savings
This is a worrying state of affairs for freelancers, who have had to face a struggle in terms of access to business support and personal finance prior to this crisis. They are less likely to have a pension or long term savings, limited childcare support from government and have had a year of Brexit and IR35 related uncertainty to lumber.
The government has extended the furloughing scheme until October, it must dot he same for the self-employed scheme and urgently plug the gaps in the existing support.
Confidence Index: https://www.ipse.co.uk/policy/freelance-confidence-index-hub.html
Coronavirus HUB: https://www.ipse.co.uk/coronavirus-hub.html
Government Self-Employment Income Support Scheme: https://www.gov.uk/guidance/claim-a-grant-through-the-self-employment-income-support-scheme