UNITE VIEWPOINT EMPLOYED VS SELF-EMPLOYED....
I hope this article finds you well. I thought we’d take a look this month at the bene- fits and joys of being self- employed...
The Coronavirus ‘Job Retention Scheme’ (JRS) for employees has so far covered the wages of 8.4 million staff in the UK unable to work during lockdown - at a cost of £15 billion.
The JRS has recently been extended until the end of October by the Chancellor Rishi Sunak, amounting in total to eight months of Government support and financial assis- tance to employees.
Conversely, the self-employed will be able to claim up to a maximum of £6,570 in August as a second and final grant covering a further three months of ‘trading profits’, covering the period up to the end of August and amounting in total to just six months of Government support and financial assis- tance for
the self-employed. This
represents just three quarters of the period of assistance given to employees.
The extension of the Self-Employment Income Support Scheme (SEISS) will include a reduction to 70 per cent of aver- age monthly trading profits from the current level of 80 per cent. Yet the ‘take home’ pay of employees under the JRS will continue to be 80 per cent until the JRS ends at the end of October!
To be clear: the JRS will cover employees from March right through until October, during which they will receive 80 per cent
of their normal ‘take home’ pay. The self- employed will receive two payments, the first covering the period March to May pro- viding 80 per cent of average monthly trading profits and the second covering the period June to August, but providing just 70 per cent of average monthly trad- ing profits, after which the SEISS will close. The self-employed will receive NO assistance during September and Octo- ber.
Applications from the self-employed will be allowed in August and the funds will be paid out in a single instalment retrospectively covering three months’ worth of profits, capped at £6,570 in total.
It is important to note here that employees have received continuous timely financial income, paid each and every month, yet the self-employed have had to endure long periods of no income and gaps in assistance from the Government.
This is despite the Prime Minister having previously suggested that the Government would offer “parity of support” to employ- ees and the self-employed.
To date, £15bn in wages has been claimed under the employees’ furlough scheme and the self-employed have claimed £6.8bn in income support (Source: The Guardian).
To give a comparison on the basis of ‘State Aid’, currently a total of £14 billion (hypo- thetically £6.8 billion x 2 – the true figure is likely to be lower) would appear to be the limit of Government assistance available to the self-employed, who found themselves in this position through NO fault of their own. Yet during the banking crisis in 2008, a res- cue package totalling some £500 billion was announced by the British government on 8 October 2008 and awarded to the banks, who found themselves in that posi- tion through EVERY fault of their own!
For the first five months (until the end of July) of the JRS, the Government has paid and will continue to pay, 80 per cent of employees wages, capped at £2,500 per month, as well as paying employers’ Nation- al Insurance and pension contributions.
It is unclear whether the Government will, for the same period, pay ‘with parity’ the National Insurance and pension contribu- tions for the self-employed?
Businesses have also received further finan- cial assistance (State Aid) by way of having their business rates suspended, yet the taxi trade’s licence fees and/or other operating costs have NOT been suspended!
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JULY 2020
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