People in the UK who are self-employed will be able to claim state aid during the recently announced nationwide lockdown, Chancellor Rishi Sunak has said.
*Starling Bank will not charge you withdrawal or currency conversion fees, but some ATMs may charge a fee.
**On top of this amount, some ATMs may charge a fee
A new allocation of £4.5 billion from the government towards supporting the self-employed means entrepreneurs will be able to claim up to 80% of their profits during the month-long lockdown. This represents a significant increase over the 40% they can currently claim under the Self-Employed Income Support Scheme (SEISS).
The Prime Minister's recent announcement of a nationwide lockdown received criticism, even from within the Conservative party. The lockdown, expected to last until at least 2nd December will see all non-essential shops and businesses closed, while schools and college will remain open for students. Companies have already been struggling to cope with the slowdown in earnings over the past year. The renewed restrictions are expected to put even more pressure on them to survive during the winter months.
One of the key points highlighted by critics of the lockdown has been that the government did not plan to provide any support to the self-employed.
However, under the latest provisions, eligible businesses will be able to claim up to 80% of trading profits in November. Also, the earlier SEISS grant covers 40% of average earnings from the previous year to cover a period of three months, up to a maximum of £3,750. The combination of the new scheme and the SEISS grant will mean that businesses can potentially receive payments of up to 55% of profits from November to January, up to a maximum of £5,160.
Additionally, the deadline for applying for government-backed support loans, initially set for 30th November, has now been extended until 31st January, providing an additional source of income for struggling business owners.
While the new plan will offer some respite to business owners, the exclusion of independent workers like contractors and freelancers has attracted further criticism. The scheme supports businesses and workers who cannot work remotely. Since freelancers do not fall under this umbrella, they would be excluded from receiving any benefits under this scheme.
The Association of Independent Professionals and the Self- Employed has called this unfair since the exclusion of freelancers means ignoring the needs of at least a third of self- employed individuals. Additionally, the enhanced coverage of 80% only applies to the month of November. Derek Cribb, the group’s chief executive, said that if the furlough scheme is extended, then the government should consider extending SEISS as well.
Despite the measures the UK government is taking to try and curb unemployment, many public bodies like the National Audit Office say that these efforts are not enough, and people are being excluded from the scheme as well as being denied furlough. The ExcludedUK Facebook group has also reported an increasing number of people suffering from depression, insomnia and suicidal thoughts. The National Audit Office said that people have had to live off their savings for quite some time because they are unable to avail of the scheme, and this is affecting the way they live.
According to the Federation of Small Businesses, several self-employed people have been suffering because of the lack of support from the government. In fact, almost 250,000 people have suffered since their businesses have stagnated and they are unable to find work. This number will only increase, and more people will become unemployed if government support is not provided to them as soon as possible.