Excluded 3million self-employed fail to get help in mini-Budget

Millions of self-employed workers have been left devastated as they watched Chancellor Rishi Sunak deliver his Summer Statement with bated breath, only to hear nothing about receiving any Covid-19 financial support.

An estimated 3million of the UK’s workforce have been left in the cold by exclusions in the support package for the self-employed, say campaigners, who hoped for help in the Chancellor’s statement yesterday after 192 MPs backed their cause.

Those excluded include people who are newly self-employed, PAYE freelancers and self-employed workers who have earned £50,000 or more in trading profits in recent years.

Those who work for themselves through limited companies are also exluded from the scheme, some can furlough themselves but others cannot and any income from dividends is not taken into account. 

 Many of those affected have been unable to work due to lockdown, losing most or all of their income, with some on the brink of winding up their business and almost all unable to claim any Government aid.

This group of people, which non-profit NGO ExcludedUK – only formed in May – estimates to be around three million, has been unable to claim help via any of the Government’s Covid-19 support schemes due to what they say is ‘unfair’ eligibility criteria.

The most aribitary of the exclusions are those affecting the newly-self employed and sole traders who have made more than £50,000 in recent years, which they will have paid income tax on in full. 

They are locked out of help of up to £2,500 per month for three months, despite there being no such upper earnings limit on the furlough scheme.

Sonali Joshi, one of the founding members of ExcludedUK, said: ‘We are disappointed that the Chancellor had no support to offer the three million excluded from meaningful Government Covid-19 support in his statement today. 

‘Whilst we appreciate the importance of the discussions about opening up the economy and the future economic recovery, those excluded have had no meaningful support for well over 100 days. 

‘With little to no income during this time and loaded with debt, amid so much uncertainty in the coming weeks and months to come, those excluded cannot look forward to the future with any hope.’

The Summer Statement comes the day after ExcludedUK held its first All-Party Parliamentary Group, which was attended by 150 MPs across nine different parties.

Following the meeting, the co-chairs, including Liberal Democrat MP, Jamie Stone, SNP Treasury spokesperson, Alison Thewliss, and leader of the Green Party, Caroline Lucas, submitted a statement to the Chancellor asking him to consider a number of things before delivering the mini-Budget.

This included responding to the Treasury Select Committee’s interim report and recommendations regarding the excluded self-employed workforce, committing to a meeting with them as a matter of urgency, and to challenge the misleading narratives about self-employed people excluded from support as somehow being fraudulent. 

ExcludedUK said: ‘We are grateful to MPs Alison Thewliss, Sir Peter Bottomley, and Margaret Greenwood who raised the ExcludedUK APPG in the debate following the Chancellor’s statement, and others who raised issues around the three million excluded. 

‘However, in his responses, the Chancellor again failed to address the inadequacies in the schemes which do not interlock and have not provided a safety net, now nearly four months on since the support schemes were announced.’

Who is excluded? 

The list of those excluded from Government support schemes currently available is already extensiv,e but continues to grow as more complicated situations come to the surface. 

For example, a self-employed worker who has made trading profits of more than £50,000 in the last three years is not eligible for the Self Employment Income Support Scheme. This affects many main breadwinners or those whose income is essential for household finances.

However, a couple who had earned £49,500 each would be able to access the grant of up to £7,500 each, while a single person earning £50,500 would not. 

Limited company directors are also unable to access the Self Employment Income Support Scheme due to the structure of their business. While they can furlough themselves, this would only mean receiving an average of around £400 to £575 per month, according to ExcludedUK data. 

Although not technically self-employed, as they employ themselves through their own limited company, many of those affected have to work this way due to client demands.

Controversy surrounds self-employed limited company directors, due to many paying themselves a low salary that minimises income tax, while taking income in dividends taxed at a lower rate and rolling up money within their business. However, they are operating within the tax system and pay corporation tax, income tax and dividend tax.

I am a PAYE freelancer and have been excluded 

Meanwhile, 33-year-old Ellie Phillips works in the media and entertainment industry and makes more than 50 per cent of her income via freelance PAYE. This means she is also not entitled to the SEISS grant. 

She said: ‘Over night, every single presenting and hosting gig I had lined up for the rest of 2020 was cancelled and my freelance reporting shifts reduced to around 20 per cent of the amount I’d usually be offered. 

‘I was locked out of the SEISS grant and because my boyfriend is still earning, I can’t access Universal Credit either.

‘I am devastated by the Budget. The Chancellor had a chance to put things right but he still won’t even acknowledge us.’ 

Ellie didn’t disregard the positive announcements made by Sunak, such as investing in young people. But she was baffled by plans to double the number of work coaches and advisors in Job Centres. 

‘Why put millions into work coaches so people can retrain? Why not put it towards the ignored taxpayers so they can continue in their chosen profession? 

‘The biggest insult from all this is the Eat Out to Help Out scheme – some people don’t have the money to eat in the first place.’ 

Meanwhile, ForgottenPAYE, the campaign group representing 1.75million freelancer workers who have been excluded from SEISS because they are fully or partially taxed at source, said it is outraged by the Summer Statement.

‘We are outraged that Rishi Sunak has failed to even acknowledge the three to five million excluded taxpayers, and continues to ignore their plight,’ the group said. 

‘At a time when he has the power to put things right, he’s chosen to exclude us yet again. 

‘”Everyone has been able to access some support,” is the line which Rishi Sunak keeps spouting. It is simply a lie. We hope the Chancellor reconsiders his decision to continue excluding UK taxpayers from financial support, and sticks to his pledge to not leave anyone behind.’

As of today, 192 MPs across nine parties have signed up to the ExcludedUK APPG.  

Tony McNamara, owner of Wallcovering Agencies, has not had any income for the best part of the year. The company mostly provides wallpaper to the hospitality industry, largely hotels and pubs.

‘The hospitality industry had to shut down and as a result so did we. And when businesses do eventually re-emerge, they’re hardly likely to spend on refurbishing.

‘I run a single person limited company and even though I do this alone, apparently that means I am not self-employed so am not entitled to SEISS.

‘My income has fallen from £10,000 plus to around £300 per month. We have managed to get around £500 per month in Universal Credit but this barely covers our food.’

Tony had to have a hip replacement in early January so had already been out of work for a long time before the lockdown was implemented. He used his time to get affairs in order, including paying a big chunk of his mortgage off.

‘I’d been in my own personal lockdown and was back in work for only two days before the nationwide lockdown. We had savings to get us through but they are running out now so we’ve decided to sell the house.

“I am also aware the business will not return to how it was for a long time so I am looking to retrain and start a new career. We will remain open and we’re luckier than many who have been forced to close down, but I am still upset and angry. 

‘A grant would have made such a difference. I am insulted to be told I am not a self-employed person.’