Bectu takes practical solutions to Treasury to plug gaps in freelance income support

Bectu’s latest  submission to the Treasury outlines concrete solutions to the financial problems facing tens of thousands of creative freelancers

Head of Bectu Philippa Childs said: “The government’s response to this crisis has been unprecedented but it has also exposed a lack of knowledge about how some parts of the economy operate in practice.

“Our submission contains evidence from real people affected and makes practical suggestions for change.”

Read her blog here.

The tens of thousands of creative freelancers losing out include:

• PAYE freelance workers who were not working on 28 February (now extended to 19 March thanks to pressure from Bectu and others)
• the newly self-employed
• personal service companies
• those earning above the SEISS profit cap of £50,000 a year
• self-employed workers with a long period out of work recently

Among solutions, the union proposes:

• A new Freelance Worker Income Support Scheme could use HMRC PAYE data to calculate average earnings for people who declare as “PAYE freelancers”. This would cover anyone who cannot be furloughed by a current or previous employer.
• Start-ups should be allowed to submit 2019/20 returns during April and have their income assessed on this basis, to cover those who have only declared as self-employed in the last year (since April 2019).
• HMRC should use dividend vouchers and examine self-assessment tax returns to enable personal service companies to fairly claim compensation for the amount of dividend income from their own company. Though PSCS can furlough themselves for PAYE income, these sums are minimal.
• Self-employed workers who have taken maternity/paternity or sick leave in the last three years should be allowed to choose the highest earning year rather than the three-year average when calculating qualifying income, or exclude certain periods from the calculation.
• The £50,000 annual profit cap should be raised to only exclude the genuinely rich.
• The government should temporarily suspend the Universal Credit savings cap so people with savings of more than £6,000 are not penalised when claiming.

Download the submission here.

Photo: Chancellor Rishi Sunak; credit: Treasury