Steph Crouch’s friends in south Wales call her a ‘workaholic.’ She’s proud of the reputation she’s built over more than a decade in the motorsports and car industries.
The 34-year-old specialises in events management and hospitality, and had secured herself a packed diary of freelance work at championships and car launches this summer.
That was before the coronavirus turned the world upside down.
Event after event has been shelved. Now her calendar is empty for the months ahead—or would be if she could bear to cross everything out.
Watching race replays and Joe Wicks’ streamed workouts is helping her fill the time for now, but the sudden gap in her income is proving much harder to fill.
‘I’m not seeing any help at all’
Crouch, from Abergavenny, had hoped the government’s new “world-leading” income support scheme would help tide her through the crisis. It will cover 80% of earnings for many self-employed workers and employees alike whose work has dried up.
But the devil is in the detail—and the small print of the schemes means millions of workers could miss out.
“Many people out there have fallen through the cracks,” Andy Chamberlain, head of policy at the Association of Independent Professionals and the Self-Employed (IPSE), told Yahoo Finance UK.
Crouch soon realised she was one of the unlucky ones.
To access the self-employment grants, 50% of your income must be from working for yourself. But Crouch made only 45% of her earnings through eligible work in 2018-19. Around 1.3 million other workers also fall foul of this rule, according to the Institute for Fiscal Studies (IFS).
She meets the threshold in the 2019-20 tax year, but HMRC won’t accept the more recent data. Crouch’s biggest frustration is that tax reforms by HMRC itself have pushed down the share of her income classed as freelance work. Upcoming rule changes known as ‘IR35’ mean many agencies she works with have changed their systems and now effectively pay her as an employee instead.
Workers ‘at the uncertain mercy’ of employers
Being even a temporary ‘employee’ for an agency should make her eligible for the government’s ‘furlough’ scheme for employed workers. It would mean a large grant to cover the other 55% of her income at least.
But agencies she works with have promised only to “look into” the scheme so far.
“If they choose not to furlough us, we are literally left with nothing,” she said. “We work day in, day out with these agencies. How do we make them do what they should and look after staff?”
With their income collapsing, many firms face immediate cashflow problems. Furloughing workers is costly as wage grants are paid as refunds, not upfront, and admin costs unpaid.
But Crouch noted the government was offering interest-free loans, adding: “I’d be happier waiting than not being paid at all.”
‘PAYE freelancers’ can be found in many sectors, with a recent survey showing almost half of such workers in media and entertainment also expect no help.
Chamberlain warned many were at the “uncertain mercy” of these temporary employers, and urged the government to offer more help.
Crouch now faces the “scary thought” of months without an income.
“I’m not seeing any help at all,” she said.
A Treasury spokesperson told Yahoo Finance UK: “We are fully committed to supporting the self employed... our scheme is one of the most generous in the world.”
Britain’s universal credit safety net
Britain’s welfare system should provide the ultimate safety net, beyond any new schemes. A government spokesperson urged people to claim the universal credit benefit, with allowances now more generous.
Some 950,000 people have applied in just two weeks, but Crouch and others face barriers even accessing this supposed lifeline. Applicants receive less or no help if they have £6,000 or more in savings.
“I’m not willing to eat into money I’m trying to pay my house off with,” said Crouch, who recently bought her first home through the Help to Buy scheme. “But I know everyone’s not that lucky, and if I have to I will.”
Crouch’s frustration is partly that the newer pay schemes she wanted to apply for include no such strict savings criteria. The Resolution Foundation is urging the government to scrap the tests, which faintly echo the controversial means tests of the 1930s.
Like many, Crouch’s main hope now is a swift return to normality and a busier diary.
“I’ve worked since I was 13,” she said. “Not knowing when I’m going to get paid again is really alien to me.”