Many contractors worried they won’t have enough money to cover basic costs

(3 minutes to read)

Almost half of the self-employed fear they will not have enough money to cover basic costs like rent and bills during the Coronavirus crisis, despite the government support on offer.

Despite the government support during Covid-19, as many as 66% of self-employed workers say they’re worried about spending all their savings within the next three months.

This is according to research by the Association of Independent Professionals and the Self-Employed (IPSE), which also revealed that 69% of contractors have seen a decline in demand, with over half (53%) saying it has decreased significantly.

Andy Chamberlain, Director of Policy at IPSE, commented, “This research shows that it is not just a few self-employed people falling through the cracks in the government support: right across the sector, freelancers are facing dire financial damage because of the Coronavirus crisis.

“The Self-Employment Income Support Scheme (SEISS) offered generous support to many sole traders, but there are a lot of freelancers who will struggle in the interim before it can be implemented. Government should look at ways to open up access to temporary support before June.”

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Andy added, “The lack of support for limited company directors in SEISS is not just a crack: it is a gaping hole in the package. The government must act quickly to fill it. We believe the best way would be to include dividend income – through which many limited company directors pay themselves – in the Job Retention Scheme.

“This would allow the self-employed who work through limited companies to furlough themselves and hold on to 80 per cent of their income. If not, we suggest a bespoke solution involving either a grant or a temporary tax break for this significant and under-supported group.

“The government has made great strides in supporting the self-employed through the Coronavirus crisis, but this research shows too many freelancers are still getting left behind. We urge the government to act on these findings and help more of this diverse and vital group through the coming months.”

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