Coronavirus: Government faces renewed calls for extended support for self-employed

The government is facing renewed calls to extend the admissions criteria of its coronavirus-focused income support for the self-employed, now that the second stage of the scheme has gone live.

From today (Monday 17 August 2020), self-employed people who earn up to £50,000 a year will be able to apply for grant worth up to £6,570 to cover any loss of income they have incurred as a result of the Covid-19 pandemic since 14 July 2020.

The grant will be paid out in a single instalment, which works out at an average monthly payment of £2,190, and will be paid within six working days of making a claim, the government has confirmed.

HM Revenue & Customs (HMRC) will contact those eligible to receive support through the scheme, who will have until 19 October 2020 to apply for the grants.

Chancellor Rishi Sunak said in a statement that the scheme is geared towards protecting livelihoods against the continued economic fallout of the pandemic.

“Our self-employment income support scheme has already helped millions of hard-working people, whose get-up-and-go drive is crucial to our economy,” said Sunak.

“It means that people’s livelihoods across the country will remain protected as we continue our economic recovery – helping them get back on their feet as we return to normal.”

The first phase of the Self-Employment Income Support Scheme (SEISS) was announced in late March 2020, with 2.7 million people using it to claim grants totalling £7.8bn, but it has been dogged by complaints that its scope is too limited.

For instance, as previously reported by Computer Weekly, the scheme has been criticised for being off-limits to limited company directors, the newly self-employed and freelancers who are taxed on a pay-as-you-earn (PAYE) basis.

Meanwhile, recently published figures from the Office for National Statistics (ONS) have revealed that the number of self-employed people within the labour market fell by a record-breaking 238,000 during the second quarter of 2020, which coincides with the onset of the UK’s Covid-19 lockdown.

For this reason, the Association of Independent Professionals and the Self-Employed (IPSE) is calling on the government to broaden the eligibility criteria of the SEISS so that more people can benefit from it.

At the same time, IPSE said the government must be prepared to reopen the scheme for a third time later in the year, if a second wave of coronavirus infections occurs.

Derek Cribb, CEO of IPSE, said the association welcomed the reopening of the scheme, but pointed out that the ONS figures neatly highlight why more government support for the self-employed needs to be forthcoming.

“It is now clear from the sharp drop in the number of self-employed in the UK that this vital part of the workforce has had nowhere near enough support compared to employees,” said Cribb.

“Two and a half million people claimed for SEISS between May and June – just half of the total of five million self-employed in the UK. Now, as the number of self-employed has fallen sharply for the second quarter in a row, we are seeing the consequences.”

Cribb added: “With the risk of a second wave looming, government must be ready not to only reopen SEISS, but also extend it to the desperately struggling forgotten self-employed. Historically, self-employed people have been essential for kick-starting the economy in recessions, but they cannot do this if they are driven out of business before they can play their part.”