Yahoo Finance Self-employed face 'cliff-edge' income drop next week if support scheme not renewed
Around 1.5 million self-employed workers face a cliff-edge drop in income at the end of the month when their emergency funding disappears as the Government has not yet announced whether it will extend the scheme.
Chancellor Rishi Sunak has said support for furloughed workers will continue until October but freelancers are not eligible for the same help as unlike employees in shutdown sectors, sole traders are still able to work.
Yet three-quarters of those receiving a self-employed grant are completely reliant on it for income as their work has dried up during the coronavirus pandemic, according to research by Organise, a whistleblowing network for workers.
More than two million people have claimed a grant, meaning that 1.5 million freelancers and entrepreneurs could be left without any income at the end of May when the emergency funding is cut off.
Andy Chamberlain of IPSE, the self-employed trade body, said extending the furlough scheme for employees while pulling the rug from under sole traders would be "a glaring injustice".
“The Government will need the self-employed to kickstart the economy after coronavirus yet most of them cannot continue their work in the midst of this deadly pandemic and are relying on Government support to keep their businesses afloat,” he said.
Self-employed people are expected to start receiving their emergency grants this week, however these will only be backdated to cover income lost during March, April and May.
No 10 Downing Street is said to be unhappy with the Treasury’s reluctance to extend the scheme as the Government has said it would provide “parity of support” between the self-employed and employees.
Christopher Lack, 34, a freelance cameraman, said the difference in treatment was completely unfair.
“I think their reasoning is that some self-employed people can still work, but then there are millions like me who can’t,” Mr Lack said.
He films sporting events such as Wimbledon and golfing tournaments and has applied for a grant to cover the thousands of pounds’ worth of work he has lost due to cancellations. He said he did not expect his industry to restart until at least October.
“I don’t know what I’ll do until then if the grant isn’t extended,” Mr Lack added. “I’ve applied for Universal Credit but was told I’m not eligible as my wife is still working. We have really had to cut down our spending and even moved house three weeks ago in order to save money.”
Almost 90,000 people have signed Organise’s petition to extend the self-employment income support scheme.
Nat Whalley, of Organise, said: “It’s not right to cut off support for people who simply can’t work due to their industry being forced to shut down. Unless Rishi Sunak extends the self-employed grant scheme, he will push millions of self-starters off a financial cliff-edge.”
Making sole traders feel compelled to return to work in order to earn a living could also hamper the slowdown of new coronavirus cases, Mr Chamberlain said. “Scrapping self-employed support could force freelancers back to work in unsafe conditions. It risks pushing them to make an awful choice between their health and their income,” he said.
A Government spokesman said: “The Chancellor indicated the self-employment income support scheme (SEISS) would be a temporary one when he announced it at the end of March, but it could be extended if necessary. The Government is keeping this under review.”
