Trade bodies and unions representing freelancers have written to chancellor of the exchequer Rishi Sunak calling for the Self-Employed Income Support Scheme (SEISS) to be extended beyond its initial three-month duration.
The Association of Independent Professionals and the Self-Employed (IPSE), the Creative Industries Federation, the Broadcasting, Entertainment, Communications and Theatre Union (BECTU) and Equity co-signed a letter to Mr Sunak requesting the extension to the scheme, highlighting that the equivalent scheme for permanent staff – the Coronavirus Job Retention Scheme (CJRS) – has already been extended until the end of October.
Although they express gratitude to the government for the scheme’s inception, the associations fear that self-employed workers face a “financial cliff-edge” when the SEISS terminates at the end of May. “We recognise that the scheme cannot run indefinitely and there needs to be a reasonable debate over how it will be unwound over time,” the letter reads.
The SEISS was announced on March 26 and enables the self-employed (sole traders and members of partnerships) to claim a grant worth eighty per cent of their average monthly profits for up to three months, capped at £7,500. The payments, paid in one lump sum, were made at the end of May. Around £6 billion was paid to nearly two million applicants.
However, the newly self-employed and limited company directors were ineligible for SEISS grants, a situation which has affected many contractors. The letter calls for HM Treasury to address this in any extension to the SEISS, by allowing the newly self-employed to file an early tax return for the 2019/20 year, and by reconsidering “its treatment of dividend income of directors so that they can make full use of either the JRS [Job Retention Scheme] or the SEISS”.
The letter quotes estimates of 750,000 sole traders and between 715,000 to 910,000 limited company directors who have so far been unable to receive any financial support from the government (beyond unemployment benefits) due to ineligibility for the CJRS or SEISS.
“To return to economic growth, the UK will need these flexible, entrepreneurial workers. The Government should invest in them now in their time of need, so that they are ready to rebound quickly once the country begins to return to economic health,” the letter finishes.
The full text of the letter can be read on IPSE’s website.
29th May 2020.
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