Corona Diaries: Workers Who Fall Through the Cracks

Thank you, Harriet Harman!

The Labour MP for Camberwell & Peckham has written a letter to chancellor Rishi Sunak on behalf of self-employed creatives who fall through the cracks re government support for coronavirus.

“I am writing to ask what further provision you are considering for these self-employed people who fall between the two schemes and to register my backing of Equity’s proposals to address this issue.

“I am concerned that many self-employed people, those working on a series of fixed-term PAYE contracts and those operating as limited companies are not eligible. This will disproportionally hit those in the creative industries.” Well said 🙏.

The government has done a fantastic job pulling support schemes together at speed during this crisis. Inevitably there will be holes and not everyone is eligible. As a sole director/limited company, I fall through the cracks. I was due to start a second contract via an agency which has now been withdrawn. See this thread on LinkedIn from workers who fall through the cracks. “I’ve been working for a year. I don’t regard myself as new.” – a PR/comms consultant messaged me.

If you’re in the same boat, here’s Martin Lewis, MoneySavingExpert.com. More advice in his guide here.

So, you may be able to furlough PAYE pay – i.e. get 80% of salary up to £2,500 a month. This isn’t likely to be huge as most earn more via dividends (no help there), but it’s something, and you can combine it with universal credit. But only if your PAYE scheme was created on or before 28 February 2020. And with Universal Credit, what happens if you have money set aside in your business account to pay tax/running costs and are over the savings threshold? Are you then ineligible for support? I’ve asked for clarification as many contractors will be in this position.

If I do furlough myself then technically, I can’t work for ‘the firm’, I can only perform statutory director’s obligations e.g. official legal filings. That’s not practical. I can’t not work for three months – I’ll have no business. I’m constantly pitching ideas, networking, marketing myself online, applying for contracts etc. Am I supposed to write letters to ‘furlough’ myself and then ‘employ’ myself again? It sounds bonkers! It’s also unfair that sole traders are eligible for a grant AND can carry on working but the same rule doesn’t apply to sole directors. Many of us have no option other than to incorporate as Ltd to get agency work. This is one thing that could be changed along with abolishing the savings rule for Universal Credit for the interim, and including dividends in PAYE income. IPSE has some good ideas here.

The other option is to apply for a Business Interruption Loan – open from 6 April 2020 and now expanded to include SMEs who didn’t meet the criteria before. This is the last resort as I’m debt-averse these days. I don’t have an overdraft and I wouldn’t be eligible as I’m paying off debt and can’t take out credit.

So, it looks like it’s Universal Credit or nothing – if I’m eligible. As Harriet Harman points out in her letter: “Current government advice is [for her] to sign up to Universal Credit which doesn’t cover her monthly rent, let alone bills or food.

“There can be no justification for self-employed workers to not receive the same level of support as employed throughout this Coronavirus crisis.

“The creative industries contribute over £100bn to the UK economy and are vital for our culture and global identity. When this crisis is over, we will need this industry to be strong and at the forefront of our economic recovery.”

Thank you to Harriet Harman, Tracy Brabin and the many other MPs and business leaders who are lobbying and campaigning to give self-employed creative workers a voice. It is much appreciated.

Have a question for Rishi? Use the hashtag #AskRishi on Twitter. The best way to engage with MPs and government is via Twitter.