While the Government has been commended for the support packages put in place for many members of society during Covid, they have been criticised for some sectors such as freelancers, directors of their own limited companies and the newly self-employed.
The Report by the Treasury Committee recognised that these key groups had been left behind and urged the Government to < i>"assist these people if it is to completely fulfil its promise to do whatever it takes to protect people from the economic impact of coronavirus. (See: Treasury Committee urges Government to support freelancers - Shout99, July 2020)
However, the Government has rejected this advice, saying the there would be too many 'practical problems' associated with identifying and supporting those who pay themselves via dividends rather than salary and that other proposals to help limited company directors would be too resource intensive.
The Government also felt that including the newly self-employed in the assistant schemes could lead to abuse and fraudulent activity.
This view was not supported by members of the freelancer community.
IPSE - 'deeply disappointing'
Freelancer group, IPSE, had submitted a proposals to assist directors of limited company and rejected Government claims that their ideas were too resource intensive, and claimed that the plight of limited companies was enough that it should commit those resources.
Andy Chamberlain from IPSE said: “It is deeply disappointing that the Government has not seen fit to do more in response to the Treasury Select Committee report.
“Although we appreciate the government ‘carefully considering’ our proposal to support directors of limited companies with a pay now, claw back later policy, we do not think its response is enough. The response claims this approach would be too ‘resource intensive’ and that including the newly self-employed in SEISS would involve too much of a risk of ‘fraudulent activity’.
“To this we would say that limited company freelancers, the newly self-employed and other excluded groups have suffered enough that the Government should commit those resources and take those risks to protect these people.
“Our research and news report after news report have shown that self-employed people have been hit particularly hard by the lockdown, seeing their incomes fall off a cliff overnight. One study we conducted showed three quarters of freelancers saw a drop in their income by an average of 76 per cent. Without financial support, this has been devastating to individuals and families across the UK.
“The self-employed are a vital part of the workforce and the economy: government must be ready to do more to protect all parts of this diverse and essential community.”
Qdos - 'disheartening'
Tax specialists, Qdos, thought that the Government's response was 'disheartening' but 'predictable'.
Seb Maley from Qdos said:"The Government’s response will dishearten what could well be millions of self-employed workers who have been left stranded throughout this crisis.
one level, the Government support has been generous, but on another, it’s deeply flawed and favours employees considerably. People new to self-employment, hundreds of thousands of contractors and many other independent workers have been all but ignored - allowed to slip between the cracks or overlooked altogether.
“Even if the lack of Government help for independent professionals is somewhat predictable, it’s still incredibly short-sighted. After all, the skills and flexibility offered to businesses by freelancers and contractors will prove instrumental in the economic recovery.”
The Government's full response is available: here.
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Susie Hughes © Shout99 2020