The UK’s 5 million self-employed and freelance workers hit by the Covid-19 shutdown are set to be offered 80% of their income under an emergency package to be unveiled this week, following an outcry that so little has been done to help this vital sector of the workforce.
According to press reports, Boris Johnson and Chancellor Rishi Sunak are finalising details of the funding plan today, following repeated calls for action, especially from the creative community. Even Conservative MPs have waded in, with former Business Secretary Greg Clark claiming the Government had just 48 hours to save the 5 million workers.
Late last week it emerged that self-employed people were not entitled to the same financial assistance as PAYE workers; in fact all they can claim is Universal Credit.
Sunak is reportedly in favour of creating a grant scheme adopted by Norway, whereby the state pays 80% of average income earned over the previous three years. This would be calculated on tax returns and banking history but like the job retention scheme, it would be capped at £2,500 per month.
The Treasury was also looking at a similar scheme in Denmark, whereby 75% of income is covered.
Workers who have only recently become self-employed would have to prove a record of regular income to claim the cash – through receipts and banking history.
Treasury sources told The Sun: “The targeting of it has to be really carefully put together because otherwise there are people who may count themselves and declare themselves as self-employed but are actually getting their income off their dividends of a company.
“So if you don’t do something that is really laser-like targeted then you could end up giving a massive subsidy to some people who don’t actually need it.
“But if there’s a self-employed construction worker whose profit margins are tiny and they have larger costs – for example if they lease out a van over the course of a year – how that costs are covered and how they make sure they don’t have huge outgoings at the same time as not having any work and working that out.”
Last week, the advertising and marketing industry issued a rallying cry for the sector to support freelance workers – from creatives and designers to runners and directors – in order to help protect jobs and the wider economy during the coronavirus outbreak.
The Advertising Production Association, which described freelancers as “the lifeblood of the industry”, said: “Now is the time for brands, agencies and production companies to work as closely as possible in order to prepare for when business picks up again.”
Yesterday, the Creative Industries Federation joined forces with nearly 30 industry bodies to urge Chancellor Sunak to set up a temporary income protection fund to benefit freelancers and the self-employed.
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