The government’s Budget has offered a lifeline to 600,000 freelancers under changes to the Self-Employment Income Support Scheme (SEISS) – but these come with strings attached.
Anyone who became self-employed in the 2019/20 tax year will now be eligible for the scheme, which pays out 80% of a person’s monthly salary in three-month grants to a maximum of £7,500.
This is estimated to impact a fifth of the 3m self-employed UK workers who have fallen between the cracks of the scheme. The Treasury said that round 2.7m self-employed people have benefited to date.
However, applicants must have filed their tax returns by last night (1 March) and the new grants come in two phases, the second of which will come with tighter restrictions.
The first of these is worth 80% of average trading profits for February to April, capped at £7,500, and can be claimed from late April.
The next phase spans May to September and only to those whose turnover has fallen by at least 30% can claim the £7,500 figure. Those whose turnover has fallen by less than 30% will receive a 30% grant, capped at £2,850.
Applications for the 30% phase can be made in July, which has angered the Prospect union, which said that Sunak had previously promised support would run to September, in line with the furloughing support for employees.
General secretary Mike Clancey said the Chancellor had “given with one hand and taken away with the other” in its offer to the self-employed.
“Despite promising to help freelancers, today’s announcement means that financial help for self-employed workers will run out two months before support to employees,” he said.
“Throughout the crisis the self-employed have been treated as second class citizens, and this Budget continues that approach with less support, more red tape, and the continued exclusion of many thousands.
“Fully backing the self-employed is not only a moral imperative, it makes sound economic sense to secure the recovery.”
Bectu head Philippa Childs welcomed Sunak for “finally showing some flexibility” but said that many freelancers remained “in the cold” as they were still excluded from the scheme, as they are on short-term PAYE contracts or are paid via dividends from companies they own.
Childs implored the Chancellor “to look again at the remaining huge gaps in the scheme and to finally end the exclusion and misery of thousands of freelancers in the arts and entertainment industries.”