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It only took three days for Amy’s world to fall apart. As a struggling actor, money had often been tight over the years. But slowly she’d managed to build up a business coaching NHS and other public sector professionals in communications skills, picking up casual work on the side to tide her through lean times. She wasn’t rich but she was managing to cover the mortgage – or at least she was, until lockdown.
“Literally, in the space of three days, I had every single person I worked for cancel work indefinitely, forever,” says Amy (not her real name). “I’ve seen companies I work for shut down completely and not come back. There were lots of goodbye calls, it was heartbreaking.”
But the bigger shock was discovering, on applying to the chancellor’s furlough scheme to support self-employed people who couldn’t work in lockdown, that she wouldn’t qualify for a penny. Almost six months on, after being rejected for every alternative job she applied for, 40-year-old Amy has exhausted her savings and she isn’t sleeping. “I feel frantic with worry, I just feel sick every day.”
Rishi Sunak famously said no one would have to face Covid-19 alone, but sadly that hasn’t been true for the excluded – a hidden army of self-employed people who, for one reason or another, have fallen through holes in his safety net. They range from company directors to carpet fitters, builders to hairdressers.
Some lost out because they’d only recently gone freelance and didn’t have a full year’s tax returns to show. Others’ incomes were deemed too high to qualify, even if in lockdown they collapsed to zero; or too complicated – as with freelance contractors paid via PAYE, a practice common in the film and TV industry. (Amy’s downfall was taking a part-time gig demonstrating karaoke machines at Hamleys toyshop over Christmas, for which she was paid by PAYE; the job was over by the time she tried to claim, but the scheme is based on last year’s tax returns.) Some have lost everything.
The campaign group Excluded UK, representing the 5% of workers that the Treasury admits its scheme may not cover, says the feeling of being abandoned by the outside world is taking its toll on members’ mental health. It recently launched a campaign asking the public to run, walk or cycle a few miles in solidarity, partly to raise sponsorship money but also to show their members are not forgotten. “People say, ‘Oh, you’re self-employed, you must be loaded.’ Well, not the people I’ve met,” says Amy.
Working for yourself has always been risky, but what’s changed in the last decade is the nature of those taking the risk. One in seven workers are now self-employed, and the stereotypical image of entrepreneurs gambling everything on trying to make it big – and preferably paying as little tax as possible in the process – is wildly out of date. Some still dream of building empires from their kitchen tables, but many are sole traders, employing no one but themselves; they’re working mothers who went freelance to fit around the kids; older people not yet ready to retire; or people forced to go it alone after redundancy.
A growing number are gig workers, employed in industries where profit depends on keeping workers off the books. Others still are navigating a fluid new millennial world of side-hustles and portfolio careers, now looking ill-served by a rigid tax and benefits system designed for a different century. Many are beginning to question the dream they were sold.
Paul left his job as a teacher last summer to work full time on the hypnotherapy practice he had been building in his spare time for years. Things were going so well that he began planning early this year to open a chain of clinics and take on staff. “I worked so hard, I was entrepreneurial, I did everything I thought governments stood for,” he says. “They want to support people creating wealth and I was one of those people.”
But when lockdown hit, and overnight he had to stop seeing people, Paul was excluded from help through the Treasury’s self employment income support scheme because he hadn’t been self-employed for long enough. He was forced to borrow from his elderly parents to survive and, although he has now been able to reopen his clinic, he worries about how he’ll repay the debts he has built up. When he hears the government talking about how it has supported other people through the pandemic, he says: “It feels like they’re rubbing our noses in it. You almost take it personally – what did I do wrong?”
Like many of the excluded, he is angered and bewildered by reports that the self-employed may have to pay more tax in future, as the Treasury seeks to recoup the costs of Covid-19 support schemes they never benefited from. But the pandemic is forcing a rethink of a settlement that has long seen the self-employed paying lower rates of national insurance, in return for fewer rights to benefits such as sick pay – a line already being blurred as ministers try to make sure those with Covid-19 symptoms self-isolate – or maternity pay.
If the chancellor really wants to renegotiate that arrangement, then a clampdown on dubious self-employment in the gig economy would be a good place to start. Last month, Jitse Groen, the Dutch CEO who recently bought the food delivery service Just Eat, declared that he wanted his company to stop using gig workers in Europe, having seen the pressures the drivers were operating under while delivering takeaways during the pandemic. “We’re a large multinational company with quite a lot of money and we want to insure our people,” he said. “We want to be certain they do have benefits, that we do pay taxes on those workers.”
A cynic might think that he’s simply seen which way the wind is blowing, following a string of legal test cases from Britain to California leading to casual gig workers being reclassified as employees with rights. But a pragmatist would say what matters is that, when pushed, companies respond; and that the pandemic may have created a window of opportunity for the chancellor to push a bit further, ensuring platforms recognise their social responsibilities towards people without whom their companies couldn’t exist.
If Sunak does seek to strip the self-employed of their tax perks, he should recognise that in return they’ll expect to be treated the same as any other taxpayer. A hard winter may be coming, especially for those who used up all their savings during the first round of Covid-19. Next time the Treasury says we’re all in it together, it had better mean it.
• Gaby Hinsliff is a Guardian columnist
Source: The Guardian
Keyword: Why is there still no help for so many self-employed people? | Coronavirus outbreak