SEISS: Rishi Sunak urged to act fast as self-employed suffer ‘shattering financial loss’

Martin Lewis grills Rishi Sunak over SEISS timetable

When you subscribe we will use the information you provide to send you these newsletters.Sometimes they’ll include recommendations for other related newsletters or services we offer.Our Privacy Notice explains more about how we use your data, and your rights.You can unsubscribe at any time.

SEISS, formally known as the Self-Employment Income Support Scheme, has offered a financial helping hand to those impacted by the ongoing COVID-19 crisis. However, while Government support schemes can prove a lifeline, as millions turn their back on the industry, it appears there is a deeper problem to address. Data released by the Office for National Statistics has shown an exodus from self-employment in the last year.

The total number of self-employed individuals has fallen by 660,000 compared to the same time last year.

This is equivalent to more than one in eight self-employed people departing from the sector.

Frustration was expressed by the Association of Independent Professionals and the Self-Employed (IPSE), who have suggested more action is needed.

Research undertaken by IPSE has shown some 1.05million freelancers have been forced to take on credit card debt to make ends meet during this challenging time.

In addition, the organisation has stated a total of 14 percent of individuals have been forced to use their overdraft facility, while 27 percent have used up all of their savings.

ONS data also showed a sharp decline in both male and female freelancers working across the UK.

A fall of 462,000 male freelancers was recorded, and there was a drop of 198,000 in female freelancers. 

It appears a certain level of financial instability has contributed to the decision of many individuals to depart from this kind of work. 

DON’T MISS
Universal Credit claimants may receive over £800 for unexpected costs [INSIGHT]
Pension tax relief may be ‘attractive target’ for Rishi Sunak today [UPDATE]
TV Licence: Britons attacked by dangerous & ‘nasty’ scam email [WARNING]

Derek Cribb, CEO of IPSE, commented on the matter and the impacts felt by the self-employed.

He said: “The latest ONS figures, which show 660,000 people have left self-employment in the last year, demonstrates the devastating impact of the pandemic on the sector.

“In the year since the first lockdown, the self-employed have suffered a shattering financial loss – especially the 1.5million who were excluded from Government support for much of this time.

“A large proportion of this group – particularly those working through limited companies – are also still excluded, with devastating financial consequences.”

While those excluded from Government support measures due to various reasons have felt the full impact of the pandemic, the sector writ large is also suffering.

Mr Cribb went on to state: “The pandemic has had a disproportionately damaging impact on the self-employed sector in the last year, with one in eight being driven out – into employment or out of work altogether – and many more struggling with severe financial loss.

“One of the crucial causes is the complexity of self-employment in the UK: the excessive numbers of ways people can be freelance – from limited companies to PAYE freelancers.

“This systemic complexity then led to terrible individual consequences as the Government struggled – and in many cases failed – to distribute support to the various and very different self-employed groups.”

When eligible, SEISS can provide financial support to the self-employed through grants which cover a percentage of trading profits.

In the Budget, the Chancellor announced the scheme would be extended to a fifth and final grant to help protect the livelihoods of the self-employed across the UK.

However, for some, the scheme as it currently stands does not do enough to help self-employed individuals. 

Mr Cribb concluded by outlining his organisation’s recommendations on how to fix a rapidly spiralling situation.

He said: “We continue to call on the Government to look again at excluded groups while there are still damaging restrictions in place.

“Looking to the future, though, we also urge the Government to give the disproportionately hit self-employed sector the time and space to recover – with economic stimulus and not tax grabs.

“We therefore also continue to urge the Government to delay and rethink the coming changes to IR35 taxation. Instead of such damaging changes, we call on the Government to take a longer term view, and initiate a full review of how self-employment and self-employed taxation work in the country – with a view to simplifying this harmfully complex system.”

Do you have a money dilemma which you’d like a financial expert’s opinion on? If you would like to ask one of our finance experts a question, please email your query to personal.finance@reachplc.com. Unfortunately we cannot respond to every email.

Source: Read Full Article