Freelance career platform UnderPinned has outlined urgent policy recommendations which could prevent two million freelancers in the UK from missing out on the Government’s coronavirus self-employed aid scheme.
Earlier this week, UnderPinned joined a number of other organisations including TrueLayer, Creative Industries Federation and The Freelancer Club in signing an open letter to the Government which called for improvements to its measures to protect the self-employed.
The campaign was launched by Coconut, after the company found that almost three quarters (71 per cent) of self-employed people think they will struggle under the current COVID-19 aid scheme.
To address the issues referenced in the open letter, UnderPinned is calling on the Government to make the following changes:
- Waiting 3 months until payments under SEISS is too long
Problem: The estimated time of payment under SEISS is in June and we believe this needs to change, fast. Members of the self-employed community are struggling to pay their mortgage, bills and buy food today.
Solution: Get payments to people faster through HMRC, or earmark some of the CBILS funding to those with early confirmation of eligibility for SEISS from.
- Sole traders that have not submitted a 2018/19 self-assessment are excluded
Problem: By not allowing 2019/20 tax year data in the relief, the Government is penalising those who started their self-employed journey in the last 24 months. They also aren’t using the latest trading data for self-employed people.
Solution: Allow 2019/20 self-assessments submitted after the 5th April to be included in the SEISS calculation.
- Those who recently transitioned to full-time self-employment are missing out
Problem: At least 50% of your income in 2018/19 needs to have been generated through self-employment to qualify for SEISS. As many self-employed people start as a “side-gig”, they may only have recently gone full-time self-employed and don’t get support.
Solutions:
- Consider the self-employed income percentage in the most recent tax year following early submission of 2019/20, rather than the average over 3 years. To avoid double claiming, exclude anyone who has been furloughed by an employer.
- Allow those who have recently started freelancing to submit the previous 6-12 months for assessment so those who have only freelanced for 7 months don’t have their whole year average lowered
- For those who are not eligible for SEISS, but are self-employed, offer a low interest deferred payment loan/grant for upskilling.
- Limited company owners are left out
Problem: Many self-employed people operate under a limited company. Sole directors of limited companies are not included in the SEISS, leaving them to get support elsewhere. There’s still a lack of clarity about whether sole directors and sole employees of a limited company can treat themselves as “furloughed” under the Coronavirus Job Retention Scheme, if they no longer have work.
Solutions
- For companies that fall below a certain income and profit thresholds based on Corporation Tax submissions with 1 or 2 Directors, provide support aligned with SEISS.
- Bring further clarity to what single director ltd companies can access with regards to support (a handbook dedicated to one/two person companies)
Albert Azis-Clauson, CEO and co-founder of UnderPinned, said: “Millions of self-employed people are at risk of falling through the cracks with the Government’s current aid scheme, with many receiving help too late, and others receiving no help at all. We are urging the Government to consider our recommendations for improving its policies to protect our dynamic self-employed workforce, who are absolutely crucial to the UK’s economy.”
UnderPinned was founded in 2019 to create a one-stop solution for the freelance economy from proposals to payment. The company aims to tackle the lack of infrastructure and support that exists for the UK’s two million freelance workers and CEO Albert Azis-Clauson recently contributed to an industry report published by the Small Business Commissioner.
