The designers still left behind by the Government’s coronavirus support packages

On 26 March the UK was given its fourth Budget statement of the month. Reacting to mounting calls for support, chancellor Rishi Sunak announced the government would begin paying the country’s five million self-employed workers 80% of their average wage up to £2,500, in a bid to further mitigate the effects of the coronavirus pandemic on the UK’s businesses.

Sunak accompanied the message with an assurance: that the UK’s self-employed and freelance workers would not be “left behind” as the country continues to lockdown in its fight against COVID-19.

The promise of parity between employees and the self-employed was welcome news for many. But as others are now learning, the measures are not as wide-reaching as necessary and thousands now face the reality of no government support as business dwindles.

Job Retention Scheme vs. SEISS

There are some notable holes in Sunak’s support package, the biggest and perhaps most glaring being its omission of personal service companies.

For self-employed workers who pay themselves a salary and dividends from their own limited company, the government has opted to forgo any financial help. There appears to be little reasoning for this decision.

The chancellor and the Self-Employed Income Support Scheme (SEISS) website both point out that those working for their own personal service company can claim support as an employee through the government’s Coronavirus Job Retention Scheme. There are, however, a number of reasons why this isn’t ideal.

In line with the latter-mentioned scheme, a freelance or self-employed worker would have to furlough themselves to qualify for government support — for sole proprietors, this means stopping operations completely. While most businesses are likely to be impacted, having to cease all work can be a daunting choice to make, and one that would require workers to pass up any work that did come in over the next few months.

Meanwhile for those who do qualify for the SEISS grant, there is no requirement to cease trading. As reported last week, profit loss is not being calculated for the SEISS grant – meaning the same amount is paid out regardless of if a worker has lost five per cent of business or 95 per cent.

“A dividend is taxed, but now not recognised as an income”

Additionally, 80% of a personal service company worker’s salary is likely to be far less than their usual take home.

The way most sole proprietors (workers running their own personal service company) receive an income is through a mix of a PAYE salary and dividends. This process effectively evens out the cashflow discrepancies over the course of the year — in months where work is scarce, dividends can be adjusted accordingly to cover both business overheads and personal welfare.

One designer’s situation, as told to Design Week, perhaps best explains why this does not translate well to the government’s Coronavirus Job Retention Scheme.

“The only option I have for government support is to furlough myself and receive 80% of my PAYE base rate salary, about £550, which is then also taxed,” they say. “For most of us there is no option other than to pay part PAYE and part dividend.

“The main reason for this being that we don’t have steady income, so we simply can’t withdraw a fixed amount per month. Instead, we need the flexibility to draw a base amount with the rest coming in the form of a dividend, as and when we have the finance or need to do so. This dividend is taxed by the government but now not recognised as an income.”

“Urgent clarity” needed for short-term contractors

Beyond personal service company workers being left behind, the SEISS package also ignores those who work on short-term PAYE contracts with different employers, as many freelance designers will be accustomed to.

On the grounds of the Coronavirus Job Retention Scheme, eligible recipients need to have been on the payroll of a company on or before 28 February. For those who weren’t employed in work then, this poses a problem.

As Philippa Childs, head of creative industries trade union Bectu, explains: “Current government advice is for people on PAYE contracts to be re-hired by their previous employer to access support through the job retention scheme and we are encouraging employers to do this… However, we know that isn’t always possible.”

A similar line was taken by Creative Industries Federation CEO Caroline Norbury, who says the organisation is seeking “urgent clarity” for temporary and short-term contractors.

Recent graduates out of pocket

In her statement, Norbury also highlighted another hole – those who commenced self-employment after April 2019. As Sunak stated in his announcement of the SEISS package, payments will be calculated from the average earnings of self-employed workers over the last three years, according to their tax returns.

In the case a worker has not been trading this long, payments will be calculated from the tax returns that are available – but for those who don’t have a tax return for the last year, no help is being offered.

This is likely to affect recent graduates and those at the start of their careers disproportionately. In this case, there is little support on offer other than accessing the UK’s welfare system via Universal Credit (UC).

This isn’t ideal, but the base rate of £94.25 a week can be topped up if further benefits are needed too, such as housing payment. More information about how UC has been reshaped in light of the coronavirus pandemic can be found in Design Week’s guide to freelance finance.

“A step in the right direction, but more needs to be done”

As more holes in the support scheme have come to light, there has been an outpouring of support for those affected. Bectu has launched an appeal to challenge the limits of support package as it currently stands.

“We acknowledge what has been announced is a step in the right direction, but there is still more work to be done,” says head of Bectu Philippa Childs.

As part of this, Bectu is urging supporters to email their MPs with a template highlighting those left out by the package.

Additionally, a change.org petition to the UK parliament has also been circulated, urging the government to consider parity between measures for sole traders and personal service company workers. It has nearly 190,000 signatures at the time of publishing.

The post The designers still left behind by the Government’s coronavirus support packages appeared first on Design Week.

In ấn Anpic In nhãn mác Anpic In brochure Anpic In card visit Anpic In catalogue Anpic In thiệp cưới Anpic In tờ rơi Anpic
In Ấn Anpic – Nổi Tiếng In Đẹp In Nhanh
Số 5 Ngõ 75 Nguyễn Xiển, Thanh Xuân, Hạ Đình, Hà Nội
0963223884
baogiainananh@gmail.com
https://anpic.vn
https://g.page/inananpic
In nhãn mác Anpic ✅ In brochure Anpic ✅ In card visit Anpic ✅ In catalogue Anpic ✅ In thiệp cưới Anpic ✅ In tờ rơi Anpic
https://anpic.vn/in-nhan-mac-dep
https://anpic.vn/in-brochure
https://anpic.vn/in-an
https://anpic.vn/in-voucher-in-phieu-giam-gia-khuyen-mai
#inananpic