Articles - 6th August 2020

The ExcludedUK campaign to make Covid relief schemes available to freelancers

Words by Josh Mcloughlin
Illustration by Will Francis

In May, 440,000 freelancers signed up to the UK government’s Self-Employed Income Support Scheme (SEISS). But millions are still unable to access government financial support during the COVID-19 crisis. Also formed in May, ExcludedUK is a non-profit NGO fighting to raise awareness and put pressure on the government to provide support for freelancers and the self-employed excluded from existing schemes.

When the chancellor Rishi Sunak announced the government’s support packages in March, freelancers and self-employed workers were left out. Sunak was quickly warned to ‘close the gaps’ in financial support. But three months on from the announcement of the Self-Employment Income Support Scheme (SEISS), millions remain in danger of losing their livelihoods and careers due to COVID-19.

According to an ExcludedUK survey published in July, 80% of respondents have not been able to access the government’s Self-Employment Income Support Scheme (SEISS) or the Coronavirus Job Retention Scheme (CJRS). The largest grouping of those affected are the self-employed (54%). Those surveyed 33% worked in the creative and media industries, with a third of respondents warning they could not survive the next three months without additional support.

‘These Government support packages provided much needed relief for many. However, it was immediately apparent that many were excluded from these measures’, the report said.

‘ExcludedUK have analysed data and statistics from the Office for National Statistics, the Department of Business, Energy and Industrial Strategy and HMRC, and we firmly believe that 3 million have fallen through the cracks in these support schemes.’

There are many reasons why freelancers and self-employed workers have missed out on government support. Those in between jobs or due to start new positions after 19 March, the newly self-employed and those who went freelance just before the crisis, long-term self-employed with either low or £50k+ net profits, those whose self-employment accounts for less than 50% of their earnings (known as the 50/50 rule) and those on PAYE freelance short-term contracts are all excluded from financial help.

Alex Gatenby is a freelance documentary producer. ‘At the start of lockdown I was due to film in America with The Economist’, she told me. ‘Within days, the next two months of work I had with them was cancelled.’

‘I also had my first potential big commission with a major broadcaster coming up. This was obviously put on hold and unfortunately the story has now dissolved, which was unbelievably gutting as it was going to be a huge step in my career and something I had worked exceptionally hard for.’

Alex looked to the government for support but was bitterly disappointed. ‘At the end of March I was elated when SEISS was announced but it quickly became clear from my accountant that there was no way I would be eligible.’

‘I am considered a new starter as I started freelancing again following two years of staff employment in February 2019’, she explains. ‘When I decided to go self-employed again I’d just been made redundant for the second time in 15 months. But as the scheme only looks at the 3 years of returns preceding YE 18/19, they said the majority of my income was PAYE so I was not eligible for a self-employment grant.’

‘Even if my 19/20 tax return was taken into account I would be ineligible as I work at some companies as a PAYE freelancer, and some where I am paid as a sole trader (gross), and over 50% of my earnings for that year were paid PAYE. Once again I wouldn’t be considered “self-employed” because the government apparently doesn’t understand how self-employed people get paid.’

There is real anger towards Rishi Sunak and the Tory government at the way freelancers and self-employed workers have been left to fend for themselves.

‘Rishi Sunak claims he has put in place “other forms of support” that we can access but this is fundamentally untrue because these forms of support are inaccessible’, says Alex.

‘61% of those excluded [from SEISS] cannot access universal credit and the bounce back loan scheme is a total shambles’.

‘The audacity of the Treasury to say these schemes are accessible is beyond belief’, said Alex.

According to the ExcludedUK survey, 72% of respondents said they were now on less than 20% of their pre-Covid-19 income, with a further 14% on between 21%-40% of normal earnings.

In a press release on July 23, the campaign group said: ‘ExcludedUK is appalled at the Chancellor’s intransigence in choosing not to resolve the disparities in the Government Covid-19 financial support schemes that have left 3 million excluded from any meaningful support. Now four months on, this has been and continues to be a desperate time for those excluded from support, as many face ever-increasing severe financial hardship and destitution, whilst a serious mental health crisis looms large.’

Tigz Rice is Hertfordshire-based photographer and author specialising in brand and boudoir photography for ‘fearless women and non-binary badasses’.

‘At the beginning of this year, I was celebrating 10 years in business and the launch of my new book. I had several public appearances and speaker roles contracted in the diary, a full-day boudoir workshop with attendees booked, as well as the groundwork for an autumn photography tour around Europe’, Tigz told me.

‘It all disappeared overnight. I have lost around £15k of work since March.’

‘As a sole director of my Ltd Company, I am ineligible for SEISS, and also because I submit annual PAYE, I missed the government cut off for furlough by 6 days. As I work all over Europe, I do not have bricks-and-mortar premises, so I do not qualify for the £10/25k business grant’, explained Tigz.

Like many others I spoke to, Tigz’s mental wellbeing has been hugely affected by the lack of government support. ‘My mental health has taken a huge hit watching ten years of hard work collapse in on me overnight, especially knowing that someone working as a sole trader in exactly the same job could have had £7500 of support already’, said Tigz.

‘The government needs to support its businesses—of all sizes—to make sure that we can continue to keep employing the rest of the UK workforce who rely on us.

There was also a stark warning for the government that excluding freelancers and the self-employed could have a massive impact further down the line. ‘I urge the government to give us some parity’, said Tigz. ‘We need you right now, but in the future you’ll need our help even more to rebuild the economy.’

Even experienced, successful freelancers are struggling. ‘I’ve worked 30 years in the UK’s world-leading events industry, most recently as a freelancer’, Roger Parker told me.

‘From August 2019 to March 2020 I had plenty of work and, like most freelancers, chose to work every day I could as the ‘rainy day’ fear is always there (also no sick pay, holiday pay, pension etc). My last paid day was 16 March and it is now widely accepted that work will not return for live events until next year. I am looking elsewhere for work but so are hundreds of thousands of others in the UK.’

Like thousands of others, Roger is excluded from SEISS on a technicality.

‘In order to meet the requirements of most UK agency contracts, I set up as a limited company last summer and took out mandatory Public Liability and Professional Indemnity cover for my business’, explained Roger.

‘I also appointed an accountant who chose to start payroll for me in the 2020-21 tax year, which therefore meant I was also ineligible for the Coronavirus Job Retention Scheme (furlough).’

The future is deeply uncertain for Roger and thousands of other freelancers in the creative industry. ‘For many reasons, my situation is not good’, he told me. ‘I have less than 3 months of savings left before I either lose my home or resort to tapping the money I set aside for my next tax bill. As a last resort, it will have to be the Bank of Mum and Dad—at this stage of my career, you can imagine how that feels to me and my family.’

 

Tessa Smith has been a self-employed vocalist, singing teacher and choir leader for the past 10 years, and has also been employed by a university on a semester-by-semester basis since 2014.

‘I lost all my gigs almost overnight. I started an online choir, but the time it takes to prepare and the amount I make from it doesn’t really balance. I managed to maintain some of my private students, but I had very little time to fit their lessons in, given the lack of childcare’, Tessa told me.

‘I actually contracted Coronavirus the weekend before the government announced lockdown, so I was already contacting some of my choirs to tell them I was self-isolating’.

‘When the government announced the furlough scheme, I was a bit relieved. But when I contacted my university, they said that I wasn’t eligible for furlough.’

‘When the SEISS scheme was announced, I also wasn’t eligible. The 3 years HMRC took into account were when I started my family. It’s hard to gig with one child under 2— even harder with 2! My maternity pay upped my PAYE earnings and my self-employed earnings from gigs decreased, so I was ineligible on the 50/50 rule, despite 100% of my income from May to October being from self-employment.’

Tessa doesn’t see the situation improving any time soon. ‘I tend to work with older/vulnerable communities and so there is hesitancy there, on both sides. I have managed to do a few performances for charities outside care homes and NHS departments, for which I am hugely grateful. But I can’t see a return to the other kinds of gigs I do in a long while’, she explained.

‘I wish that the Government hadn’t imposed the 50/50 rule. It seems arbitrary when you look into the lives of freelancers. Summer is the busiest and most financially lucrative season for almost every musician I know; it’s where the vast majority of our SE income comes from’.

‘The HMRC know how much tax I pay annually. it shouldn’t be too difficult to average my income to a monthly wage and support me with 80% of that whilst my sector remains essentially locked down.’

Rob Bettle is a freelance sound designer and engineer who works on musicals and plays across the UK and around the world. Since March, he has had no income whatsoever.

‘I have been lucky enough to have a prosperous career in this relatively small but competitive industry’, Rob told me.

‘My wife and I along with our two young children live on the commuter belt of London (Reading). It’s an expensive place to live with equally high travel costs involved, so the pressure to make a good living is high.’

‘As a sole trader, my average trading profits for the last three years worked out to be £10k over the £50k cap for the SEISS.’

‘My income is very variable’, explained Rob. ‘For two of those years I was under the £50k but in the last year I had a particularly good set of jobs which pushed my average over.’

‘In the last three years, I have paid £50,630 income tax and national insurance. In my twenty years of being a taxpayer—ten of which have been self-employed—I have always been honest about my earnings and paid my bills on time and in full.’

‘I feel completely let down by a system that I hoped would be there for me in my hour of need’, says Rob.

Like many others I spoke to, Rob is struggling without support from the government.

‘We are currently using my tax savings, which I had ready for my July tax bill, to survive’, Rob said.

‘My wife has a small income (she is a midwife) but not enough to sustain our ordinary outgoings. We have to start paying the mortgage again in September and things will become very stressful then, as I don’t see any signs of theatres opening soon.’

In a statement, ExcludedUK said it ‘reiterates its call on the Treasury to meet with the Co-chairs of the ExcludedUK APPG and ExcludedUK to discuss these exclusions as a matter of urgency. There is no rationale or fair justification for these gaps in support and the Treasury’s repeated assertions that everyone has been or can be helped in some way is simply not the case. The Chancellor’s reasons of the need to avoid complexity, implementing measures at pace and implying such exclusions were needed to combat fraud, are simply not acceptable.’

The campaign group has spearheaded dozens of petitions to put pressure on the government to provide support for freelancers and the self-employed, including campaigns to remove the 50% earnings barrier so all self-employed workers receive support, provide COVID19 income support for the newly self-employed without HMRC records, and a call for a one-off grant to be paid to anyone who has not benefited from a Covid-19 scheme.

The pressure on the government to do more to protect jobs in the creative industry is mounting. In ExcludedUK, freelancers and self-employed workers have come together to highlight the vital contribution they make to the UK economy and the injustice of excluding them from help.

This is an existential crisis for the creative industries. If freelancers and the self-employed are not given the support they need to get through these inhospitable economic conditions, the UK’s world-leading, £100bn+ creative industries will be rubble long before any vaccine is developed.

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