SEISS: Rishi Sunak condemned on self-employed scheme – ‘what an absolute disgrace’

Martin Lewis outlines details on the fifth SEISS grant

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Rishi Sunak launched a number of support schemes throughout 2020 as coronavirus raged on, chief among them the furlough and SEISS schemes. The latter proved to be especially controversial as it emerged millions of self-employed workers could not claim support due to stringent eligibility rules.

In light of this, the Excluded Unity Alliance emerged to push Rishi Sunak for change.

This group detailed an estimated 3.8 million UK taxpayers who failed to qualify for support “through no fault of their own” and recently, the alliance hosted a lobbying event in Liverpool.

Steve Rotheram, the Metro Mayor of the Liverpool City Region, took part in this event and “blasted” the Chancellor for his apparent failures.

Mr Rotheram claimed: “If we are charitable, we could say that the Government were right, weren’t they, to put support packages forward as quickly as they possibly could, but they were desperately wrong when it was pointed out that three million people had been missed out of that support and then did nothing at all to help that group, and then compounded it with lie after lie saying that the packages of support were there.

“And for anybody who has listened to some of the webcasts, the events that we’ve had with different excluded groups, there’s one that will forever stay in my mind and in my memory, and it was a young lady who came on and said that she’d gone through two bouts of chemo for breast cancer and she actually said, genuinely it’s there you can watch it on the video, she said she would rather go through a third round of treatment than the treatment that she’s received from our Government.

“What an absolute disgrace for [Rishi] Sunak to hear stories, personal stories of people’s loss, personal stories of horror, of things that happened to people who have worked all their lives and paid their taxes and then personal stories of people who had taken their own lives and we know that the number of people, of what’s happened to them, is attributable to the lack of support from national Government that has grown over these last 18 months.

“So what I’d say is yes we will continue to fight, yes you need to continue what you’ve been doing with the voice and the messaging to central Government and with the support that you’ve got from all of these good people but for millions who around the country who understand the injustice of this, I’d say solidarity to all.”

The Association of Independent Professionals and the Self-Employed (IPSE) also recently highlighted just how costly the exclusion and pandemic has been for the self-employed.

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In early August, IPSE published research into the long-term impact of the pandemic on the £300billion freelance sector.

The research showed more than two out of five freelancers (42 percent) lost over 40 percent of their turnover.

It also found that overall, two out of three freelance businesses (67 percent) were negatively affected by the pandemic, which translated into a drop in turnover for sixty percent of all freelancers. Almost one in 10 freelancers (nine percent) saw a devastating drop in turnover of over 90 percent.

The financial damage of the pandemic also varied significantly by gender, age and business structure. Three out of five sole traders (62 percent) saw a drop in turnover compared to 55 percent of limited company directors.

Almost two-thirds (62 percent) of freelancers aged over 35 saw a decrease in turnover, compared to half of under-35-year-olds. Over two out of five male freelancers (43 percent) also said their turnover decreased a lot compared to 36 percent of female freelancers.

IPSE detailed Government support – and the gaps in that support – seems to have been a factor in the spread of financial damage.

Although SEISS offered support to 3.4 million self-employed people, it excluded millions and this led to 52 percent of freelancers saying they do not feel supported by the Government. This rose to more than two out of three (67 percent) among limited company directors, who were excluded from SEISS.

Andy Chamberlain, a Director of Policy at IPSE, commented: “This research shows the true, long-term financial impact of the pandemic on the self-employed sector, which contributed over £300bn a year to the economy before the pandemic.

“Not only did two out of three freelancers see a drop in turnover: two out of five saw a drastic 40 percent-plus drop. One in 10 even saw their turnover slashed by over 90 percent. These are huge setbacks for a freelance business: setbacks that many will not recover from for years to come.

“The damage of the pandemic was refracted through the Government support on offer – or rather, the lack of support for a significant proportion of the sector. This is reflected now in the many freelancers who now simply do not feel the Government supports them or their way of working: particularly limited company directors.

“Limited company directors feel persecuted by the Government right now not only because they were completely excluded from the SEISS grants, but also because of the changes to IR35 taxation the Government forced through earlier this year. As our research found, among limited company directors considering leaving self-employment, this was a key reason for one in three.

“Historically, not only did the freelance sector contribute over £300bn to the economy each year; it also played a crucial part in economic recovery during downturns. Freelancers offer the flexible expertise businesses across the country need to get themselves up and running again. The real question now is with the scale of the damage to freelancing – and the structural damage because of IR35 – will freelancers still be in a position to play that part?

“After so many were left out in the cold during the pandemic, and with so many threats to freelancing today, do people want to enter into self-employment?

“To make freelancing appealing and to get this vital sector back on its feet again, our message to the Government is this: repair your relationship with self-employment, clear up the mess after IR35, and build a stimulus package to support and kickstart the worst-hit parts of the sector.”

Express.co.uk contacted HMRC for comment

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