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Saturday, March 28, 2020

Falling between the gaps

Following on from my comments a few days ago about the impact of COVID-19 on small businesses the Guardian reports that thousands of self-employed people – in particular those working in the creative industries – who set up limited companies have been “devastated” by being excluded from the chancellor’s bailout:

On Thursday night Rishi Sunak said the government would pay self-employed workers 80% of their profits – up to £2,500 a month – for three months, starting in June.

He said the measure was “one of the most generous schemes anywhere in the world” and would help 95% of the self-employed. A similar scheme has already been offered to employees.

However, it has emerged that neither scheme will help anyone who has set up a sole-person limited company, meaning thousands of freelance writers, photographers and others working in the creative arts will get no help.

The Guardian has been contacted by several of those affected, who say this will ruin them financially. They face having to claim universal credit instead, with its far lower payouts.

Thousands of actors, designers, film crew and others found themselves out of work and unpaid when the government introduced its coronavirus restrictions.

One of those is a sound engineer who does work for documentaries for the BBC and Netflix. All his projects are on hold and his work has evaporated, he said.

“This is a disaster for thousands of people like me,” the worker, who did not want to be named, told the Guardian, after two hours on while calling the universal credit phone line.

“I was advised to set up the limited company as it was a tax-efficient way to operate, and because it makes processing payments much simpler. Many who work in this world have done the same. We are just as self-employed as those being helped, but inexplicably find ourselves left out the scheme. It’s devastating.”

The creative industries may not be anybody's idea of a key industry, and in these times they clearly come low down on the pecking order, but bear in mind that we all stuck at home watching material they have produced. And of course there are other self employed people and sole traders who will also lose out from this scheme.
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