The Government faces continuing criticism about its lack of support for the five million (approx) people in the UK who work on a self-employed or freelance basis.
They are not able to benefit from the Coronavirus Job Retention Scheme announced on Friday.
Some but by no means all will be able to access the measures for small businesses (deferring VAT and interest-free loans), if they meet those criteria with the only other state support being benefits like universal credit and working tax credits.
Earlier this week, the House of Commons Public Bill Committee has proposed an amendment to the Coronavirus Bill 2019-2021 which would require the Government to introduce Statutory Self-Employment Pay, similar to the system introduced in Norway.
What is Statutory Self-Employment Pay?
If this amendment is accepted, it would be equivalent to furlough leave for employees and would allow freelancers and the self-employed to receive guaranteed earnings, whichever is lower, of:
- 80% of their monthly net earnings, averaged over the last three years; or
- £2,917 per month
Yesterday, the Chancellor, Rishi Sunak, promised help for the self-employed but would not commit to precise timings or details.
Comment
The difficulties with proposing a payment scheme for the self-employed is that the only data which the Government has to work with, are tax returns which are only submitted annually in arrears and therefore could be completely inaccurate to use for estimating future income. It is estimated that since the last wave of tax returns, one million people who were self-employed will now no longer be so, but one million others will have become self-employed.
The Government is concerned that any new scheme is at risk of abuse and they need to strike a balance between this risk and supporting those self-employed and freelance workers that desperately need and deserve help.
We are monitoring this situation and will keep this blog updated with any developments.
How Nelsons can help
Laura Kearsley is a Partner in our expert Employment Law team.
For further information or to comment on this article, please contact Laura or another member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.