NEWS Freelancer updates

FREELANCING 2020: The latest news for freelancers on the coronavirus lockdown

By Tristan Grove Chief correspondent

AUGUST EXTENSION FOR SELFEMPLOYED SUPPORT

On 29th May, Chancellor Rishi Sunak announced the government would be extending its Self-Employment Income Support Scheme until August 2020. Self-employed people will be able to claim the grant for an additional three month period in a lump sum in August. It will now cover 70 per cent of eligible claimants’ average income instead of 80 per cent. It will be capped at £2,190 a month, or £6,570 in total.

The scheme is open to self-employed people who work as sole traders and who filed tax returns for 2018/19. IPSE welcomed the extension of the scheme, saying it would be an “overwhelming relief” for eligible self-employed people. However, it warned the government must do something for groups that had been “patently forgotten” such as “limited companies and the newly self-employed”.

“SEISS scheme extension an overwhelming relief [...]but limited companies and the newly self-employed have been patently forgotten”

freelancers

to close their business because of the coronavirus crisis

“NOT ELIGIBLE FOR ANY SAFETY NET” – NEW RESEARCH HIGHLIGHTS PLIGHT OF LIMITED COMPANIES

One in five highly skilled freelancers expect to have to close their business because of the coronavirus crisis, new research by the University of Edinburgh and IPSE has revealed. In most cases (73%), this was because they worked through limited companies.

Three quarters (74%) said they had lost income because of the crisis, with an average drop in earnings of 76 per cent. The report revealed the personal cost of this, with some respondents saying they had been forced to sell their homes and others reporting they were struggling to feed their families. Chloé Jepps, Head of Research at IPSE, said: “The plight of contractors working through limited companies can make for difficult reading because this group has not just been forgotten, but actually abandoned by the government.”

GOVERNMENT PLANNING TO GO AHEAD WITH IR35 REFORMS IN 2021 DESPITE DAMNING LORDS REVIEW

The government passed its Finance Bill for this year, including plans to forge ahead with the changes to IR35 rules, despite a damning House of Lords review of the legislation. David Davis MP proposed an amendment to the legislation, delaying the changes until 2023/24 in light of the coronavirus crisis. Since MPs failed to vote on the amendment, however, the Finance Bill passed with the IR35 changes set for April 2021.

At the end of April, the House of Lords Economic Affairs Finance Bill Sub-Committee published a damning report that said the government’s proposals to change IR35 were “riddled with problems, unfairnesses, and unintended consequences”. It urged the government to rethink the proposals and announce whether or not it would go ahead with them in six months – meaning it would have to remove them from the Finance Bill. The government did not take up the recommendation, instead committing to driving through the changes in April 2021.

“The government’s proposals to change IR35 were riddled with problems, unfairnesses, and unintended consequences”