The Chancellor’s announcement of an Income Support Scheme to help self-employed people during the Coronavirus outbreak has brought reaction from the recruitment industry and those representing the self-employed.
“This is a cashflow crisis,” said Neil Carberry, Chief Executive of the Recruitment & Employment. “The support initiatives are the big action businesses and self-employed people need. But to really work effectively and protect jobs, cash needs to come in quickly and be easy to access. The Chancellor should now turn his attention to ensuring supported loans are quickly available, businesses receive furlough cash quickly and the self-employed scheme can pay out before June. We will be working to make sure that this package supports the UK’s full flexible jobs market, including one million temporary agency and contract workers.”
The support announced by the Chancellor will take the form of a tax free grant worth 80 per cent of their average monthly profits over the last three years.
IPSE (the Association of Independent Professionals and the Self-Employed) has also welcomed the move, calling it an “historic lifeline” for UK’s self-employed. The measures announced today by Chancellor Rishi Sunak guarantee self-employed people who work as sole traders and earn up to £50,000, 80 per cent of their income. The grant will be based on their last tax return.
The measures will be welcome to most of the self-employed, especially given recent IPSE and People Per Hour research that shows over two in five (43%) say that without support they might have had to close their businesses in the next three months. On average, they said they think their savings could cover them for 22 weeks if they had to stop working (although among sole traders this is lower at approximately 14 weeks).
“This will offer essential support to the many hard-working self-employed people across the country who are losing projects and contracts because of the Coronavirus outbreak,” said Derek Cribb, CEO of IPSE. “We understand this is an immense and complex undertaking, and urge the government to get this vital support to freelancers as soon as practically possible. This is an unprecedented package and a very welcome response to our campaign for freelancers and the self-employed.
However, Cribb also flagged provision would not meet everyone’s needs: “While this assistance is practical and wide-ranging it does not, however, cover all self-employed people,” he said. “We will keep working to fill in these gaps. With our mission to support and promote the work of independent professionals and the self-employed, we will keep striving to stop those in need from being left behind.”
“We welcome this comprehensive and generous package to support one of the most complex strands of our labour market,” said Peter Cheese, Chief Executive of the CIPD. “The complexities of building a support package for the self-employment has no doubt proved a significant challenge. We are pleased to see the fair approach to creating parity between this support scheme and the job retention scheme for employees.
“It’s vital that money is made available to workers facing immediate financial hardship as soon as possible,” he said. “Many will already be suffering from reduced hours and cancelled services and will be anxious that they have to wait until June to benefit from the income support scheme. Ensuring that people can access Universal Credit as soon as possible in the meantime is crucial.
“There is also need a need for guidance on whether people who can still work some hours or jobs albeit in a greatly reduced capacity are still able to benefit from this scheme,” he added.
